1906 Archives - Green Market Report

StaffMay 3, 2022

The fast-acting edible company 1906 has secured a seven-figure investment from Connecticut Innovations (CI), Connecticut’s strategic venture capital arm and the leading source of financing and ongoing support for Connecticut’s innovative, growing companies. According to the company statement, it is a first-of-its-kind investment by a state venture fund in a cannabis business.

“Along with our confidence in 1906’s future prospects, CI’s investment also recognizes the increasingly important role the cannabis industry will continue to play in the economic, health, and social development of the state,” said Lauren Carmody, vice president of marketing at Connecticut Innovations. “With its track record of innovation and success, 1906 is a great addition to CI’s expanding portfolio. This investment will help accelerate the company’s ambitious plans for growth and establish 1906 as the first of many cannabis industry leaders based here in Connecticut.”

1906 edibles are different from other due to its fast onset time. These edibles typically have a psychoactive onset of 20 minutes or less. The company has six different thoughtful formulations of super-powerful plant medicines like Bliss for happiness and Go for energy. The company prides itself on its moderately dosed cannabis.

CI’s decision to invest in 1906 was prompted by the company’s leadership position as the number one cannabis pill in the U.S., successful revenue generation as well as its commitment to and leadership in the areas of employment, health and wellness, and social justice. The investment aligns with CI’s mission to promote innovation and diversity in Connecticut and supports efforts to prioritize public health, public safety, social justice, and equity. 1906 has a commitment to patient and consumer advocacy, as well as its strong stance on pressing social justice issues, has made 1906 a leading voice in the industry.

“CI’s investment in 1906 is a major milestone for the cannabis industry — institutional investors don’t need to wait on the sidelines for changes to federal laws before they participate in the cannabis market (or funding the growth of this industry),” said Peter Barsoom, CEO of 1906. “The investment from CI will help us grow our business in the state and squarely positions 1906 at the center of the cannabis movement in the Northeast at exactly the right time. We are excited to bring 1906 and our products to Connecticut.”

Connecticut Innovations joins other investors, including Arcview and Merida, in this current round of funding.

Julie AitchesonOctober 7, 2020

To understand the unique distribution challenges of Oklahoma’s exploding cannabis market, one must first address the question that has preoccupied researchers, entrepreneurs, and investors ever since Oklahoma became second in the nation for dispensaries per capita, trailing only Oregon. That question being, “Why Oklahoma?” According to a 2018 Verilife study, for every 100,000 Oklahomans there are approximately 15.6 dispensaries. Over 7,000 cannabis business licenses have been approved in Oklahoma, with per capita cannabis spending projected to reach $226.40 by 2025.

The recent Marijuana Business Factbook projected that Oklahoma’s medical cannabis sales would hit $700 million-$860 million in 2020, more than double the $345 million brought in a year ago. The state looked like it could potentially place adult-use cannabis on the November ballot, but just a week ago Channel 6 in Oklahoma reported that the Oklahoma Supreme Court has struck down a petition that could have put recreational marijuana on the ballot. “If the petition were to have gotten enough signatures, State Question 813 would have been on the ballot in 2022. The court said the wording of the petition was misleading, and people who signed the petition weren’t getting enough information to make an informed decision.”

Liberal Licensing

Oklahoma’s liberal approach to licensing (it only costs $2500 to get a license there, as opposed to most other states where it can cost millions) and a 4% tax rate have been major factors in the state’s booming cannabis economy. This, in addition to the fact that Oklahoma has registered a comparatively high (5.8) percentage of the population for medical marijuana patient cards relative to other states with no qualifying conditions necessary means that there should be plenty of buyers to keep all of those businesses profitable. But given the sprawling geography of Oklahoma and a large number of dispensaries, success hinges on an efficient distribution model in order to keep shelves stocked and customers happy.

One company, Colorado-based 1906, has partnered with Stash House, the #1 distributor in Oklahoma. To date, Stash House has placed 1906 products in over 150 dispensaries across the state. So that covers getting the product from Point A to Point B, at least for 1906, which has logged record-breaking sales and reorders since entering the Oklahoma market, but distribution issues extend beyond product delivery. Issues related to packaging and liability, for example. A company that manufactures boxes used to sell marijuana may still be held liable under the law even though they may be removed from the actual sale of marijuana by a factor of two or more.

Also, given the scale of the cannabis distribution network necessary to keep Oklahoma’s dispensaries supplied and the fact that partial legalization necessitates more oversight (and thus more bureaucratic red tape, etc.), there is an additional burden on suppliers, distributors, and businesses to comply with stringent regulations. This additional scrutiny includes that from taxing agencies since cannabis is still illegal at the federal level. This burden can impact the ability of companies to reinvest profits in refining and expanding their distribution models.

Perhaps Oklahoma will take California’s lead, where state-licensed distributors take possession of goods before selling them to retailers. These distributors can represent multiple brands but must also test products for safety and pay state taxes on the goods. While there have been delays and sparsely stocked shelves as licensing and testing procedures are refined, this wholesale supply chain model is expected to inject new capital into the cannabis economy and encourage growth. Whatever route Oklahoma retailers and cannabis companies looking to get in on the action taken to address their distribution dilemmas, new capital and growth will certainly rank among the top priorities.

Other companies that have seized the opportunity to help simplify the supply chain include The MJSupply, OK Buds, and Argent Cannabis to name a few.

Debra BorchardtOctober 28, 2019

Denver-based 1906 closed on an $18 million in its most recent capital raise. The round was led by Navy Capital and included a range of institutions, high net worth individuals and 1906’s existing investors. 1906 said it will use the investment to fund the company’s launch in the additional states of Illinois, Massachusetts, and Michigan.

1906 is known more for its support of medicinal cannabis research and invests a percentage of its revenue in clinical trials and educating healthcare practitioners. The company also invests in corporate social responsibility, specifically targeting employment opportunities for those formerly incarcerated individuals who have paid the heaviest price for a century of cannabis prohibition.

“Navy Capital’s investment in 1906 reflects our belief that it is one of the best brands in the country,” said Sean Stiefel, a Navy Capital portfolio manager. “We are very impressed with the company whose fast-acting formulations represent the cutting edge of cannabis. Our investment will help 1906 become one of the leading brands in the new adult-use markets of Illinois, Massachusetts, and Michigan.”

The company’s CEO Peter Barsoom is a Wall Street refugee who set his sights on the cannabis industry in 2014. Initially, 1906 targeted the infused chocolate market that focused on delivering products directed at certain moods. The six experiences, Love, Go, Chill, Midnight, Bliss, and Genius are advertised as delivering finely tuned combinations of select cannabis strains, with potent plant medicines, engineered to be the fastest-acting edibles on the market.

According to the company statement, 1906 has just released Drops, pressed tablets (or pills) that represent the new frontier in cannabis medicine. Developed after years of research and testing, Drops are the only pill on the market to combine medicinal cannabis with plant medicines for targeted effects. Like all 1906 products, Drops employ a patented fast-acting technology that uses lipid microencapsulation for rapid onset (under 20 minutes), the fastest technology in the industry.

The company said that 1906 Drops combine highly effective plant medicines with a low dose of THC plus CBD to create a suite of portable, discreet, vegan, and zero-calorie medicinal formulas in a familiar user-friendly format for daily remedies—a swallow-able coated pill.

1906 Founder Peter Barsoom says, “With Drops, cannabis medicine has finally arrived. For far too long, consumers and patients have had to rely on smoking cannabis in order to get fast onset time and specific effects. After years of R&D, we have finally brought a healthier, more effective product to the cannabis marketplace. And for the first time, we’ve introduced a new experience for cognitive enhancement, Genius, which we believe will finally kill the Reagan-era propaganda that cannabis is brain-dulling.”