Cannabis-Focused Fund Invests in Frontier Financial, Building $10M Fund
October 23, 2015
Florida-based cannabis-focused investment group, Phyto Partners is integrating the legal marijuana space with big data, leading a $1 million seed round of financing for Frontier Financial Group, a cannabis-based big data services firm based in Washington D.C.
In addition to acting as the lead investor, Phyto Partners has entered into a strategic partnership with Frontier that will give Phyto access to the company’s data analysis.
Launched in August 2014, Frontier provides intelligence and in-depth analytics regarding opportunities and developments within the nascent legal marijuana space to a wide field of users that include operators, entrepreneurs, investors, and researchers, among others.
“Our vision is to make legislators and decision makers more educated so they can assess the viability of this product with better data,” said Frontier founder and chief executive, Giadha Aguirre DeCarcer.
Ms. DeCarcer, who previously founded the consulting firm, GNI International, and co-founded the accelerator, VentureCamp, states that although there is a certain level of information on the cannabis sector available for commercial purposes, the information needs to be centralized, organized, and interpreted.
Formed in early 2015, Phyto Partners, which is focused on venture capital and investment opportunities in the cannabis space, is in the process of building a $10 million private equity fund, and as of June, has successfully raised $2.2 million, according to filings with the Securities and Exchange Commission (SEC).
Cannabis is currently legal for medical use in 23 states, and has been made legal for recreational use in Alaska, Colorado, Oregon, Washington, and the District of Columbia. It is still illegal on a federal level, but in February of 2014, the Justice Department issued guidelines allowing financial institutions to serve marijuana companies that comply with state laws.
As the push toward legalization continues, the investment activity within the space has been increasing. Phyto Partners is now one in a growing field of private equity and venture capital investors focused on legal marijuana. One of the leaders in the field is Privateer Holdings Inc., which along with venture investor Founders Fund, closed on a $75 million funding round. Others include, New York-based cannabis firm, Tuatara Capital, which raised $25.8 million as of July of this year toward a debut fund, according to its filing with the SEC, and Chicago-based Salveo Capital, which is also in the process of raising a $25 million marijuana-focused fund.
Phyto’s other portfolio companies include, Corsica Innovations Inc., a supplier of automated marijuana growing systems, and Steep Hill Labs Inc., a biotech, research development, and analysis firm that serves the cannabis market.
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