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Extra Crunch Tuesday: Where these 6 top VCs are investing in cannabis

Tuesday, May 19, 2020 • By Walter Thompson

Welcome to Extra Crunch Tuesday

Image Credits: Bruce Bennett / Getty Images

Before the COVID-19 pandemic, the spring of 2020 felt more like winter for cannabis startups; the industry was in the midst of a correction that saw many companies contract, consolidate or disappear.

But after millions of Americans began sheltering in place, many states classified cannabis as an essential business. Now, investors are bullish on the industry: the recent cash crunch lowered valuations, but revenue and growth are on the upswing, which means there are bargains to be found for a limited time.

We spoke to six investors who actively invest in the sector to harvest their thoughts:

Morgan Paxhia, Managing Director, Poseidon Investment Management
Karan Wadhera, Managing Partner, Casa Verde Capital LLC
Sean Stiefel, CEO, Navy Capital
Matt Hawkings, Founder/Managing Partner, Entourage Effect Capital
Larry Schnurmacher, Managing Partner, Phyto Partners
Mitch Baruchowitz, Managing Partner, Merida Capital Partners

Join Extra Crunch Live today at 2 p.m. EDT/11 a.m. PDT for a conversation with Alexia Bonatsos (founder, Dream Machine VC) and Niko Bonatsos (managing director, General Catalyst).

In a chat moderated by Senior Editor Alex Wilhelm, the pair will discuss how the pandemic has changed their outlook, but we’re also planning to talk about the future. Extra Crunch subscribers will have an opportunity to ask questions and join the conversation, so sign up here for a trial membership.

Thanks for reading; have an excellent week.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

Popping the hood on Vroom's IPO filing image

Image Credits: Peter Dazeley / Getty Images

Online car-buying service Vroom filed for its IPO yesterday, so Alex Wilhelm used this morning’s column to analyze the company’s S-1.

Because so few companies are seeking to go public these days — and because Vroom has modest growth and low margins — he tries to answer the question many are likely asking: why would this company go public now?

Sponsored by TechCrunch

If you know any startup teams, entrepreneurs, investors or B-school students, add this to your shopping list.

3 views on the future of work, coffee shops and neighborhoods in a post-pandemic world image

Image Credits: onurdongel / Getty Images

Sheltering in place is new, but because TechCrunch has been a work-from-home organization virtually since its launch, our staff has adapted quickly.

None of us can predict the future, but we thought it’d be interesting to discuss the long-term changes that might emerge from a post-COVID-19 era:

Devin Coldewey: coffee shops and co-working
Alex Wilhelm: the future of the home office
Danny Crichton: revitalizing urban and semi-urban spaces

This Week in Apps: Houseparty battles Messenger, Telegram drops crypto plans, Instagram Lite is gone image

In this week’s roundup of all things mobile: advocacy groups say TikTok is still violating COPPA, Slack rolls out new iOS and Android apps and Huawei finds a loophole to ship phones with Google Apps.

Plus, a deep dive into funding and M&A news, a look at the latest download rankings and why Quibi blames the coronavirus for its less-than-stellar debut.

Image Credits: ampolis / Getty Images

There’s no way to tell what our lives will look once this moment is in the rear-view mirror; the uncertainty created by the COVID-19 pandemic is so deep, our toes can’t touch the bottom.

I have a hard time taking in the entirety of the social and economic disruptions we’re experiencing, but this guest post by Ann Miura-Ko gathers a comprehensive list of questions about how we might live and work when COVID-19 is behind us.

Is the e-commerce shift going to last? image

Image Credits: Bloomberg / Getty Images

Now that we’re going to great lengths to keep our distance from each other, consumers and businesses have been adopting e-commerce at a faster pace.

Looking at Shopify’s merchant onboarding data from the last two years, the platform is seeing “jaw-dropping growth:” in February and March, it added more vendors than it did in all of 2018.

Once you add in contactless payments, insane traffic growth rates for D2C websites and a universal consumer desire for safety and convenience, virtual storefronts do not look like a fad.

With stadiums closed, TV networks turn to live esports broadcasts image

Image Credits: Electronic Arts

Due to COVID-19, stadiums and arenas around the world have fallen silent as fans and athletes lockdown at home, but the closures have created “a breakout opportunity for esports broadcasting,” writes Eric Peckham.

He interviewed Electronic Arts SVP Competitive Gaming Todd Sitrin to learn more about how game publishers are building bridges to non-gamers with televised events.

Use dynamic CTAs to close more B2B leads image

Image Credits: John Lund / Getty Images

For growth-minded readers: tips for using an omnichannel approach to boost remote sales, how dynamic CTAs can help close more B2B leads, and a few words about increasing referrals by closing the intention gap.

What SoftBank's Vision Fund results tell us about troubled startup sectors image

Alex Wilhelm examined SoftBank’s fiscal year results twice yesterday.

In his second look, he teased apart the news regarding the end of the conglomerate’s $100 billion Vision Fund to see “what we can infer about the broader startup market itself.”

SoftBank's Q1 2020 earnings presentation mixes comedy and drama image

Image Credits: Bryce Durbin/TechCrunch

Alex’s first take on SoftBank yesterday looked at the top-line numbers, but he intentionally spent more time examining the company’s artistic choices when it came to its earnings deck.

A unicorn flying over the Valley of Coronavirus would be a pretty nice concept for a tapestry, now that I think about it.

Arm's financials and the blurring future of the semiconductor sector image

Image Credits: Tomohiro Ohsumi / Getty Images

Reporter Arman Tabatabai and Managing Editor Danny Crichton pored over the financials of SoftBank subsidiary Arm Holdings, a semiconductor company that produces designs for chips that run the world’s top-selling smartphones.

They interviewed CEO Simon Segars last year, so Arman and Danny were interested in seeing “how the company and its owner have held together in the year since we last got a public overview of its financials.”

African countries need 'startup acts' more than ever to support innovation image

Image Credits: Jacek Sopotnicki / Getty Images

Africa would benefit greatly if more countries supported their nascent startup ecosystems with operational support and legislative frameworks, writes Adedana Ashebir, a regional manager for Village Capital.

Decrypted: No warrants for web data, UK grid cyberattack, CyberArk buys Idaptive image

Image Credits: Treedeo / Getty Images

In this week’s edition of his security column, Zack Whittaker reports on how the U.S. Senate voted to allow the U.S. government to view citizens’ browsing records without a warrant and looked at how cyberattackers invaded the internal systems of a company that helps manage the UK’s power grid.

In other news, Pitney Bowes was hit by ransomware again, two security startups snapped up funding rounds, and Zerodium announced it would “temporarily stop buying exploits that target iPhones because it has too many.”

California Today: California Is Slowly Reopening. It’s Complicated.

View in browser|nytimes.com

Continue reading the main story

May 19, 2020

By Jill Cowan

Gov. Gavin Newsom announced new criteria related to coronavirus hospitalizations and testing that could allow counties to open faster than the state, during a news conference at Mustards Grill in Napa.Rich Pedroncelli/Associated Press

Good morning.

(Don’t get California Today by email? Here’s the sign-up.)

On Monday, at the start of another week under California’s stay-at-home order, Gov. Gavin Newsom rolled out slightly loosened criteria for counties that hope to allow businesses to reopen more quickly than the state overall.

“This is an important period of time,” he said. “In the next few weeks we are looking at a number of significant milestones.”

Going forward, state health officials said they were no longer requiring counties to have zero Covid-19 deaths for two weeks, for instance.

Rather, Mr. Newsom said counties should continue to track hospitalization numbers, and also track positivity rates, meaning the percentage of tests that come back positive. (It should be less than 8 percent for a week.)

Already, though, 24 counties had been allowed to reopen more businesses under the prior criteria, he said. And the statistics the state has been tracking — including hospitalizations and Covid-19 cases requiring intensive care — have been promising.

Mr. Newsom estimated that all but a handful of California’s counties may be able to qualify soon.

[See which states have reopened and when.]

Still, as The San Francisco Chronicle reported, even within the once-united Bay Area, paths are starting to diverge county by county, and the patchwork of rules has become a little confusing.

Continue reading the main story

Mr. Newsom emphasized that local considerations would continue to drive his conversations with county health leaders.

Here’s what to know:

The governor said 53 out of 58 counties meet the new criteria. So does that mean they can all reopen?

Not yet. Mr. Newsom said that number was a rough estimate that would become clearer in the coming days.

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And each county will have to file documentation showing that it meets the criteria and that officials have plans in place to help ensure restaurants keep customers apart and to reinstate restrictions if necessary.

Which counties have already been allowed to loosen restrictions?

So far, the bulk are smaller counties in far Northern California, but the list is expected to grow. You can find the list of counties, along with the documents officials filed with the state, here.

Did we get any more information on when other kinds of businesses can reopen?

Yes. Mr. Newsom said that in the next few weeks, stores may be open not just for curbside pickup. In the first week of June, sporting events may start taking place, although they’d still be without fans.

Continue reading the main story

And for those of us feeling a bit shaggy, haircuts could be on the way somewhere in that same time frame.

I live in the Bay Area or Los Angeles. Does that change anything?

Yes. It’s important to remember that all the so-called regional variance also allows counties to keep stricter orders in place than the state’s, if local leaders say that’s appropriate.

[See coronavirus cases by county in California.]

Tell us how reopening is going in your community.

If you live in a county that has been allowed to reopen more quickly, we want to hear about your experience. If you’d like to share for potential publication, please email us at CAtoday@nytimes.com with the answers to the following questions:

1. What is your name and age, and what county do you live in?

2. What was the first newly reopened business you visited?

3. What precautions, if any, did you take?

4. How did it feel to be out? Did you feel like you had a clear idea of how to manage risks?

Thanks for reading, and for your help.

Here’s what else we’re following

We often link to sites that limit access for nonsubscribers. We appreciate your reading Times coverage, but we also encourage you to support local news if you can.

The U.S.N.S. Mercy hospital ship leaving port in San Diego, headed to the Port of Los Angeles.Gregory Bull/Associated Press

After about a month and a half at the Port of Los Angeles, the U.S. Navy hospital ship Mercy started its slow journey back down the coast to San Diego on Friday.

The ship was called as a relief valve for hospitals in the region, if they became overwhelmed with Covid-19 patients. But its mission shifted over the weeks, and late last month, most of the staff were moved into hotels onshore.

According to the governor’s office of emergency services, medical staff members from the Mercy will stay in the L.A. area to help at skilled nursing facilities and other sites.

Within minutes of opening up, phone lines crashed as calls flooded in for California’s landmark program to provide aid to undocumented workers — who pay taxes but have been left vulnerable. [The New York Times]
A federal judge ordered Los Angeles to move more than 6,000 unhoused people living near freeways into shelters. He said that the freeways and on- and off-ramps were particularly dangerous. [The New York Times]
A vaccine remains the most elusive and potentially effective weapon in the fight against Covid-19. Researchers in the Bay Area may have a leg up. [The San Francisco Chronicle]
If you missed it, Atwater, a small community in Merced County, declared itself a coronavirus “sanctuary city,” meaning its leaders are refusing to enforce state orders to keep some businesses closed. [Merced Sun-Star]
Disney’s top streaming executive quit on Monday to become the chief executive of TikTok. [The New York Times]
Can Airbnb survive the coronavirus pandemic? It’ll be difficult. [CityLab]
Trying to figure out where to hike or ride your bike in the Bay Area? Here’s a guide. [The San Francisco Chronicle]

And Finally …

Illustration by Larry Buchanan/The New York Times

Not to be corny, but if there is one thing I genuinely hope I will take with me once this is over — once life returns to something like normal — it is the ability to find joy in small things.

Things like deleting mediocre photos off your phone. Like circling your Oakland block on foot, expanding the boundaries of what feels like home. Like lightly indulging a sort of “Little House on the Prairie” fantasy, even though the closest you have to a homestead is your driveway in L.A.

Those are just a few of the subjects of 14 essays my colleagues on the Styles desk put together. They asked writers to write about what’s bringing them joy these days. Maybe you can relate. (And no, this doesn’t have anything to do with the 2015 Jennifer Lawrence vehicle — but it could if it brings you joy!)

California Today goes live at 6:30 a.m. Pacific time weekdays. Tell us what you want to see: CAtoday@nytimes.com. Were you forwarded this email? Sign up for California Today here and read every edition online here.

Jill Cowan grew up in Orange County, went to school at U.C. Berkeley and has reported all over the state, including the Bay Area, Bakersfield and Los Angeles — but she always wants to see more. Follow along here or on Twitter.

California Today is edited by Julie Bloom, who grew up in Los Angeles and graduated from U.C. Berkeley.

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