Pax Labs, a San Francisco-based maker of vaporizers, confirmed it raised $420 million in equity financing, a record for a U.S.-based marijuana company.
The firm said the round included both new and existing institutional investors, including New York-based Tiger Global Management and San Francisco-based Tao Capital Partners.
Pax’s raise nearly doubled the previous high for a U.S. cannabis company, a $250 million debt financing by California-based multistate marijuana operator MedMen in March.
“This financing round allows us to invest in new products and new markets, including international growth in markets like Canada and exploring opportunities in hemp-based CBD extracts,” Pax CEO Bharat Vasan said in a news release.
According to technology publication The Information, Pax initially sought to raise about $150 million, but surging interest from investors boosted that figure.
The investment represents increasing mainstream interest in the cannabis space.
“It is a further signal that the floodgates are starting to open given that institutional investors have invested,” Matt Karnes, founder and managing partner of New York-based GreenWave Advisors, told Marijuana Business Daily.
Cowen, a New York investment management company, likely was involved in Pax’s financing, sources told MJBizDaily. Cowen declined to comment.
Pax, which spun off from e-cigarette producer Juul in 2017, was founded in 2007.
In late 2018, the company closed a $20 million funding round, opting to keep the investment small to “avoid becoming overly dependent on venture capital,” according to Vasan.
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