California-based marijuana producer and distributor Flow Kana closed a $125 million funding round – which appears to be the largest private funding round for a cannabis company in the United States.
The previous record was held by the $119 million raise that Acreage Holdings closed in July 2018.
Flow Kana’s latest funding round was led by Gotham Green Partners, a New York-based private equity firm that has previously invested in the company.
The raise will be used to “double down on the supply chain strategy and allow Flow Kana to expand into other categories,” CEO Michael Steinmetz told Marijuana Business Daily.
To date, Flow Kana has raised $175 million to build and scale its supply chain focused on small craft cannabis farms in Northern California.
The craft cannabis firm will continue to build out its facility in California’s Mendocino County with the goal of being able to manufacture both branded and white-label products by the end of the year.
While multistate operators such as Acreage and Cresco Labs previously led the pack in funding raises – with a significant focus on expanding into new markets – Flow Kana is focusing its strategy on Northern California.
The tactic behind this, according to Steinmetz, is to prepare for eventual federal legalization.
California already provides nearly 80% of all the cannabis consumed in the United States, he said, albeit much of it through the black market.
“We don’t need to create more cultivation,” he said. “We just need to organize and streamline” getting the product to market.