Cannabis wholesale platform LeafLink raises $100 million

LeafLink, a New York-based wholesale cannabis platform, raised $100 million in Series D funding co-led by CPMG, L2 Ventures and Nosara Capital.

Why it matters: The deal's structure reflects growing challenges in the cannabis market, in part due to raw material price increases. It's a convertible note capped at a $500 million valuation, down from an $800 million valuation in 2021.

• LeafLink also restructured its C-suite. Co-founder and CEO Ryan G. Smith gets kicked upstairs to executive chairman, and is succeeded by former WeWork co-CEO Artie Minson (who joined last year as president).
• Fellow co-founder and CTO Zach Silverman becomes a senior advisor, with the role going to Karan Gupta (ex-Shift Technology).
• Last year the company implemented two rounds of layoffs, and says proceeds from the new investment will be used to develop and expand services beyond marketplace, where it claims a 50% market share.

The big picture: Cannabis companies were heartened last October by President Biden's marijuana pardons and request for a review of whether marijuana should remain classified as a Schedule 1 substance under federal law. But there's been no word on that review's progress, of even if it's begun, and voters in three states rejected marijuana legalization ballot questions in November.

• “The United States has a complex history with cannabis, fraught with unjust policies that have disproportionately incarcerated minorities and disrupted countless communities and families.," Ryan Smith tells Axios. "LeafLink hopes that the rescheduling of marijuana lies on the horizon and that state-regulated cannabis companies can look forward to more fair treatment soon.”