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🎉 $100 Million In Fresh Funding
Jane joins the growing list of cannabis e-commerce companies raising millions...
Welcome to Four PM — a newsletter that provides cannabis industry news & insights from cannabis industry leaders.
In Today’s Issue 💬
→ Jane’s Fresh Funding. 🎉
→ California’s Cannabis Taxes. 🚀
→ Dutchie Adopts Terpenes. ✔️
Jane’s Warchest Of Capital
Founded in 2015, Jane technologies has raised $100,000,000 in fresh funding…
In 1972 students from Stanford’s artificial intelligence lab sold a small quantity of cannabis to students making cannabis the first product ever sold online.
Since then, online sales have been surging with over two billion people purchasing products online in 2020, amounting to $4.29 trillion USD.
With consumers unable to purchase cannabis in stores throughout 2020, cannabis e-commerce sales reached record highs last year.
Subsequently, several companies saw significant increases in the demand for their products which allowed them to raise hundreds of millions of dollars.
Today, Jane Technologies joined this list of cannabis companies that have secured millions of dollars to help cannabis retailers sell products online.
Founded by Socrates Rosenfeld in 2015, Jane technologies accounts for 20% of all legal cannabis sales in the United States.
Jane has used the Shopify playbook where they help cannabis retailers sell products through their own websites as opposed to the Amazon model of creating a single centralized marketplace.
“We had to go and figure out a way to connect and tie the consumer to the brand and the retailer.
We couldn’t do that by shipping products directly to the consumer, and we couldn’t do that by competing against the retailer;
We had to work in partnership with our retail partners to provide them with powerful e-commerce enablement tools.” Rosenfeld said to TechCrunch
A Record Year… 🏆
In 2019, Jane saw $100 million in total transaction volume, with one million people on the platform, working with 1,000 dispensaries.
In 2021, Jane forecasts it will reach $3.5 billion in total transaction volume — working with 2,100 dispensaries, including stores in Canada with 700,000 unique products in their database today.
Per Jane, 17% of legal cannabis sales were done online before the pandemic, however, during the pandemic, online sales reached a high of 52%.
Now, in August 2021, Jane’s internal data suggests that consumers have grown accustomed to purchasing cannabis products online with online sales accounting for 38% of all legal cannabis sales.
With $100 million USD in fresh funding — Jane technologies is a force to be reckoned with.
Jane’s success also highlights how the cannabis industry is more than large enough for more than one company to succeed in helping cannabis retailers succeed with online sales.
Record Taxation Revenue
The largest cannabis market in the world has reached record highs for taxes…
In 1996 California became the very first state to legalize cannabis for medical purposes.
20 years later, in November 2016, California voters approved the Adult Use of Cannabis Act (Proposition 64) and less than two years later all adults in the State were finally able to purchase cannabis.
Smashing Records… 🎯
Despite a global pandemic and the mandatory shut down of several retail businesses — the cannabis industry thrived throughout this chaos.
Consequently, California saw a 55% increase in cannabis earnings vs 2019, taking in $817 million in adult-use cannabis tax revenue in 2020.
The Legislative Analyst’s Office said combined excise and cultivation tax revenue for the fourth quarter, which ended in June, totaled $212 million.
→ Cannabis businesses pay a 15% excise tax on wholesale products.
→ Additionally, they pay a cultivation tax of $9.25 per ounce of cannabis.
It’s important to note that these figures do not take into account additional regular sales taxes or any local revenues to municipalities where the transactions take place:
→ Sales taxes in California is 7.25%
→ Municipalities can charge up to 7%
With $4.4 billion worth of cannabis sold in California in 2020, one could estimate that these additional taxes could be as high as $500 million USD.
Future Outlook 🔭
Today some 76% of cities and 69% of counties in California have banned cannabis retail stores.
Despite this, California sales are already exceeding nations such as Canada, with sales on track to reach $5.6 billion next year, and $7.2 billion by 2024.
It’s amazing to see the states who have so far legalized cannabis reap the rewards.
For California, it seems very likely that they would have the means to generate many millions more in taxes if they could encourage more municipalities to allow cannabis retail stores to open their doors.
Assuming more & more municipalities do move in this direction, I can’t see it being very long until this new record is once again broken.
Dutchie's Brand New Look
Consumers will now have access to products’ terpene profiles on Dutchie…
One of the most common questions consumers are asked when purchasing cannabis today is would you like an Indica or a Sativa?
Ask any new consumer and they will quickly inform you that an Indica product is the version of cannabis that makes you sleepy, and a Sativa is the version of cannabis that gives you energy.
Why is this a problem you ask?
An overwhelming majority of cannabis producers label their products using terms such as Indicas, Sativas & Hybrids.
The problem, however, is that these terms bear no correlation to the effects cannabis products produce despite this “common understanding”.
Instead, these terms are representative of the physical characteristics of cannabis plants with Indicas being shorter in height with wide leaves and Sativas being taller in height with much more narrow leaves. 👇🏽👇🏽
It would be a stretch to suggest that there is an immediate solution available to solve this problem with almost every cannabis retail store in North America currently presenting products to consumers as either Indicas or Sativas.
That said, progress is being made to solve this problem with consumers now asking producers to list products’ terpene profiles on their packaging such that they can understand the version of cannabis that works best for them.
When purchasing cannabis online, however, much of this information is not made available despite the efforts being made by producers to provide consumers with access to it.
Why Does This Matter?
On the 31st of August 2020, GTEC became the first Canadian cannabis producer to list their products terpene profiles on their products packaging under their premium cannabis brand BLKMKT. 👇🏽
This announcement was extremely well received, and in the time since several additional producers have followed GTEC’s lead and have since updated their products’ packaging to include this information.
Today, with a majority of cannabis retail stores in Canada and the U.S using Dutchie, every consumer who purchases cannabis from one of these cannabis retail stores will now have the opportunity to gain access to this information.
Not every consumer is going to be interested in using this information when deciding which cannabis products to purchase, and that’s perfectly okay.
Long term, however, to successfully solve this problem it remains an essential step to provide consumers with access to this information in-store & online.
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