Confident Cannabis Bags $12M Series A

According to Forbes, Confident Cannabis, a maker of tools that help businesses test, sell and buy wholesale cannabis, has excellent news to brighten up the spring: The Palo Alto, California-based company raised $12 million in Series A funding, bringing their total tally to over $18 million. Cannabis-focused investor Poseidon Asset Management led the round with participation from Bullpen Capital, Y Combinator, Greenfield Global and Base Ventures and FJLabs.

Although investor appetite was strong said Steve Albarran, co-CEO and co-founder of Confident Cannabis, the fundraising did not come without snags. "We were disappointed to see how few mainstream venture capitalists were ready to invest in the industry," he admitted. "Things are changing, but Sand Hill Road isn't quite ready to help us build the next great American industry."

Perhaps but that certainly doesn't apply to lead investor Poseidon Asset Management. Albarran found a great affinity with them. "By now, we've probably spoken with every fund investing in the industry, and we haven't met anyone we liked as much as Poseidon," explained Albarran, adding he first met co-founders (and siblings) Emily and Morgan Paxhia at various cannabis events and has become familiar with them over the years. "They 'get it' and have great references from other founders they've backed. Additionally, they're helpful with things that matter the most to founders like us: hiring, strategy and access across the industry. We have a lot of great investors, but only a few have added as much value as Poseidon."

Finding the right investors for the Series A was a priority. "Some of the investors participating were great and aligned perfectly," said Albarran. "Some didn't align as much. We wanted to ensure that we didn't just think about the money coming to the table, but also the guidance and resources of investors that have experience in tech, in marketplaces and in building large teams to grow from their Series A. With a lot of interest came a lot of pitching and mutual due diligence. Even with all this work, we were still able to close the round pretty quickly and get to building our team."

According to Albarran, the capital infusion will be used for personnel hiring and market expansion. "We're hiring for every department in our company, from client success to engineering to data scientists," he said. "The funding will help us build more features faster and to ensure the entire U.S. cannabis industry has access to Confident Cannabis to continue simplifying cannabis wholesale testing and trade."

In a release announcing Confident Cannabis' Series A, Emily Paxhia praised the inroads the company has made with its software solutions, a strategy that was crucial for Poseidon to take the reins in the Series A. "Poseidon knew a wholesale solution that easily integrates into the workflow of the growers, processors and manufacturers would be critical to this industry," she said in a public statement. "Wholesale solutions are not easy to execute well, but we believe this team has the strategy, acumen and drive to optimize the way cannabis flows through the supply chain."

Last October, Confident Cannabis launched a software platform in Oregon designed to simplify wholesale trading for all operators in the supply chain, enabling wholesalers, producers and retailers to make informed decisions based on cannabinoid profile, terpenes, price, category and lab results. Dubbed Confident Cannabis Wholesale, the platform was created to fill a void in an inundated market that can be surprisingly low-tech.