Brazil: Cannabis attracts family offices in million-dollar rounds

RIO DE JANEIRO, BRAZIL – There is a profusion of businesses operating at full steam in the cannabis segment – even if cannabis is not yet regulated in Brazil. Some of these businesses, already in the third round of investments, have reached around R$100 million (US$19 million) funding.

Bill 399/2015, which contemplates regulating medicinal and industrial uses, has been stalled in legislative houses since 2015.

The pharmaceutical company Ease Labs stands out among its peers for its ability to attract investments. About to open its third round, the company confirmed, in late April, the contribution of R$12 million from tennis player Bruno Soares.

Made through Madfish, the Olympic athlete’s family office, the investment may represent a trend among athletes committed to the cannabis lifestyle and breaking taboos around it.

From the second investment round, which had contributions from ALF Participações and the Next fund, Ease Labs secured a share of the Bizhub innovation fund -previously Next- from consultancy Alvarez & Marsal.

“We have made a new round of investments because they have demonstrated that they are the right people to receive this contribution. We are with them for the long term; we will go all the way to the IPO,” says Luis Camisasca, head of innovation at Alvarez & Marsal.

Paving the way for cannabis, with the structuring of the market and its consequent expansion paves the way for Ease’s plans to continue researching and making available treatments not only with the plant itself but also with psychedelics that have been showing excellent results in psychotherapy-assisted treatments – such as psilocybin, from “magic” mushrooms.

“Today, cannabis is our main portfolio, but we want to get into psychedelics and other substances. Our idea is to be a vehicle of innovation in Brazil, bringing these compounds that have proven action,” anticipates the CEO and founder of Ease Labs, Gustavo Palhares.

THE EVOLUTION OF THE BUSINESS

Until a few years ago, crowdfunding was booming in the so-called “canna-business”. Individual investors collectively bought small shares and received company shares in return.

That is how Dr. Cannabis (the first niche marketplace) maintained the health of its operation, with R$750,000 raised in the first round in 2018; and R$2 million in the second in 2020.

“Crowdfunding fits very much along the lines of those who want to participate in the market but don’t want to set up a business,” explains Viviane Sedola, CEO and founder of Dr. Cannabis.

Today, the entrepreneur who invests money out of his own pocket to get a cannabis company up and running and knocks on the door of potential partners finds angel investors, corporate funds, and, especially, family offices increasingly interested in the cannabis business in Brazil.

Sometimes, it is not even necessary to go knocking from door to door to find a willing investor. Murilo Chaves Gouvêa, founder and partner of Cannapag, can tell you that.

The recent angel funding he received, of R$200,000, came from the interest of the investor himself, Diego de Assis, who sought Murilo after a lecture to talk more about the financial solutions offered by Cannapag.

Knowing the lack of a digital bank and payment solutions for the cannabis segment in Brazil and the rest of the world, he did not let the opportunity pass.

Nor did Zion MedPharma need to run after money. With a starry cast of partners, including Claudio Lottenberg, chairman of the board of Albert Einstein Hospital, and Dirceu Barbano, former president of Anvisa, who signed the first authorizations for the importation of medical cannabis in Brazil, it did not take long for the family office Green Rocks to come forward, offering a partnership.

According to Ricardo de Paula Salomão, one of the fund’s members, they studied four other companies before betting on Zion. But what made one of Brazil’s leading specialists in private health bet on the cannabis business? Obesity surgery, for example.

It was complex until people accepted that it could be valid and safe. I think the cannabis issue goes a little bit that way. Ten years ago, I don’t know if I would have gotten into this myself,” confesses Lottenberg.

Alex Lucena, a partner at The Green Hub, agrees that, although we are still far behind in regulation, we have prepared entrepreneurs in Brazil comparable to those around the world.

“They are very technical, scientific profiles. Very good people in the medical field. We are far from being able to plant, but we have a first-level health tech and agro tech to promptly act when it opens.”

Lucena is starting to move to launch another round of investments with TGH – this time, a Series B round. A first step toward structuring the group’s next goal: opening a private equity fund with a strong pillar in ESG in the next three years.

The impression that everyone is talking about cannabis is not just an impression. What contributes to this scenario are information portals like Sechat, which covers medical and industrial cannabis.

PRODUCTS AND INVESTMENT FUNDS

Even with 15 medications approved for sale in Brazilian pharmacies, there is no prospect of a change in legislation this year. How, then, to clear the backlog?

“We need to focus on products to stimulate investments and then be able to show the experience to investment funds. And develop cultivation technology with extraction and purification of the oil so that the extract is uniform throughout the different batches,” teaches Dirceu Barbano.

Betting on a wide range of products was the strategy chosen by Tegra Pharma, headed by partners Marcelo Galvão and Jaime Ozi. Tegra raised R$10 million in investments from the partners themselves and from an angel, José Roberto Machado, former vice-president of retail at Santander, who is currently part of the pharmaceutical company’s board.

Maeté, on the other hand, is open to entrepreneurs who have no idea where to start and modest investors.

“The person says how much they want to invest, and we do the calculation to see what equivalent shares would correspond, and they choose whether they want to invest in a specific brand or holding company,” explains co-CEO Barbara Hedler.

The 30 companies under the Maeté umbrella count on the services made available by the hub to develop. The Floyou brand of hemp panties, for example, received assistance in importing textiles from end to end, including customs procedures.

THE MAIN PLAYERS IN CANNABIS

THE GREEN HUB

Much of the Brazilian cannabis market goes through The Green Hub. Partners Alex Lucena, Marcelo de Vita Grecco, and Marcel Grecco formed the company in 2017. Since then, they have acted as an accelerator and incubator, raising investment rounds that allow them to reinvest in 12 companies in Brazil’s cannabis ecosystem.

In May, TGH will lead the Latin American delegation at the Regenerative Cannabis Live meeting at the UN headquarters in New York. The event brings together global leaders and thinkers in the cannabis industry.

ZION MEDPHARMA

Zion MedPharma’s partners have two important names that bring great know-how to the company’s operations and the sector itself.

Bringing together the expertise of Claudio Lottenberg, with over 20 years in the management of Albert Einstein Hospital (first as president and then as chairman of the board), and Dirceu Barbano (director of Anvisa between 2008 and 2014), the importer and distributor has an estimated market value of R$60 million.

Today, Zion distributes a Swiss cannabis-based herbal product in Brazil and plans, as its next moves, to conduct clinical studies and pharmaco-technical innovation for future drug production on Brazilian soil.

DR. CANNABIS

Connecting patients desirous of medical cannabis consultation and prescription to prescribing physicians, Viviane Sedola, CEO and founder of Dr. Cannabis, created the first physician and product marketplace in 2018.

After Dr. Cannabis, other companies emerged offering similar services. The cannabiz woman – her social media name – is now focused on educating doctors and holding conferences on medical cannabis.

SECHAT

The largest Brazilian news website was born thanks to the nose of three partners: Daniel Jordão, Pedro Pierro, and Fernando Pensado. They traveled abroad in search of ideas for cannabis entrepreneurship. In 2018, they were in Uruguay, the US, and Israel.

At first, Sechat was focused on news about the medicinal use of cannabis. Then, the plan expanded to cover the industrial use of the plant. They also realized how promising is the niche of fairs and events on the subject.

Sechat has scheduled the Medical Cannabis Fair, from May 3 to 6, in São Paulo, together with Medical Fair Brazil, the national edition of the German fair organized by the Messe Düsseldorf Group considered the largest event of the medical-hospital industry worldwide.

CANNAPAG

Aiming to facilitate payments and financial transactions, one of the world’s great challenges of the cannabis industry, the pilot of what is now Cannapag emerged in the Abrace (Brazilian Association of Support Cannabis Esperança, in João Pessoa, PB) patient association in 2019.

Murilo Chaves Gouvêa, one of the three partners of the first Brazilian cannabis fintech, learned about its medicinal use when treating skin cancer with the plant.

Besides offering means of payment services to patient associations, drug importers, grow shops, drugstores, pharmacies, and medical clinics, Cannapag plans to launch a credit card for patients this year. The card will be produced with cannabis raw material, replacing plastic with hemp.

HEMPMEDS

The Brazilian arm of the multinational HempMeds was the first company to supply cannabis-based products for medicinal purposes in Brazil. With revenues of around R$22 million, the pharmaceutical company started operations in the country in 2014 and since then has sustained an operation with a growth of around 50% per year.

Throughout its trajectory, HempMeds has already collaborated with the importation of more than 140,000 cannabis derivatives for Brazilian patients. Matheus Patelli, executive director of the pharmaceutical company, worked in organizations in Brazil such as Ambev and the American Chamber of Commerce before entering the canna business.

EASE LABS

One of the pharmaceutical companies that has drawn attention for the speed with which it is developing in the market, Ease Labs has a trajectory that began with the importation of drugs for its patients and that, still this year, should start to have products available on the pharmacy shelves.

The company is about to launch its third investment round, worth R$70 million, which should establish the company’s operations among the most important in the sector in Brazil. The contributions reach R$100 million, adding up the other rounds.

TEGRA

The pharmaceutical company Tegra, part of the OnixCann group, is headed by Jaime Ozi, one of the most relevant figures in the niche in the country. His trajectory in canna-business began in 2016 when he assumed the country management of Canopy Growth in Brazil.

Due to a brand strategy change, the entrepreneur disengaged from the operation in 2019. Shortly after, Marcelo Galvão, president of OnixCann, invited him to join the company as partner and vice president.

SINAPSE SOCIAL

The company was born in late 2019 as a business consultancy that unites the legal expertise of partners Emilio Figueiredo and Ricardo Nemer with the business experience of the other two partners, Sandro Langer and Vinicius Alvarenga, to serve entrepreneurs interested in developing the cannabis ecosystem in Brazil.

A pioneer in aligning business opportunities through the legal and entrepreneurial prism, Sinapse has a strong social action and holds shares in four companies in the industry.

With information from Forbes