The U.S. Drug Enforcement Agency is recommending that cannabis be reclassified as a Schedule III drug, which would codify that it has medicinal value and is less dangerous than its current Schedule I designation, Axios has confirmed.

Why it matters: The U.S. cannabis industry needed a win, just days after one of its best-known companies, MedMen, filed for bankruptcy protection.

By the numbers: Venture capital investment in cannabis companies has fallen sharply in the past couple of years, totaling just $550 million in 2023 after hitting $3 billion in 2019 and $2.7 billion in 2021, according to PitchBook.

• One small exception is Nova Farms, a Massachusetts-based grower and retailer that this morning announced a $20 million investment from Chicago Atlantic.
• Publicly traded stocks also have slumped. Curaleaf shares, for example, opened yesterday down 70% from their 2021 highs.

The big picture: Rescheduling would allow cannabis companies to deduct business expenses on their taxes, which would particularly help dispensaries that typically operate on very tight margins.

• It also would eliminate restrictions on cannabis research, and could create legal protections for medical marijuana users who've run afoul of housing or employment rules.

Look ahead: There also are industry hopes that this would be the first step toward allowing interstate trade of cannabis, given that the market has struggled with oversupply in certain states.

• But that could only be accomplished by subsequent approval by the Food and Drug Administration, and even that might be limited to particular cannabis strains or products.

Caveats: DEA rescheduling would not result in national legalization or pharmacy sales.

• Nor would it permit federally-chartered financial institutions to do business with cannabis companies, although Congress might view the move as important enough to finally approve a cannabis-specific banking bill known as The SAFER Act.

The bottom line: The road to national legalization has been long, and remains far on the horizon. But this is a significant pit stop on the way, and could spark an investment revival.

PG&E (NYSE: PCG) said it's in talks to sell a minority stake in its power generation unit to KKR.

Why it's the BFD: The California utility needs capital to help finance its grid upgrade and wildfire prevention work, as it seeks to prevent a repeat of the 2019 Camp Fire that caused deaths and sent the company into bankruptcy.

• It's also getting criticized for high consumer bills, and claims the KKR deal could lower those costs by $100 million over the next two decades.

The bottom line: This deal still needs signoff by California utilities regulators, who so far have expressed skepticism. There also are a slew of outside organizations lining up in opposition.

🚑 Enlaza Therapeutics, a La Jolla, Calif., covalent biologic platform, raised $100m in Series A funding. JPMorgan Asset Management led, and was joined by Frazier Life Sciences, Avalon Ventures, Lightspeed Venture Partners, Samsara BioCapital, Amgen Ventures, Regeneron Ventures, Bregua Corp., Pappas Capital, and Alexandria Venture Investments. axios.link/3UGhoMV

🌎 Arbol, a New York climate insurance startup, raised $60m in Series B funding. Giant Ventures and Opera Tech Ventures co-led, and were joined by Mubadala Capital. arbol.io

• AiDash, a provider of wildfire risk software for utilities, raised $58.5m in Series C funding. Lightrock led, and was joined by Lightsmith Group, Duke Energy, Sabanci Ventures, Marubeni and insiders National Grid, Edison International, SE Ventures, G2 Venture Partners, Benhamou Global Ventures, and Shell Ventures. axios.link/3QocnGd

• Securitize, a Miami platform for tokenizing real-world assets, raised $47m. BlackRock led, and was joined by Hamilton Lane, ParaFi Capital, and Tradeweb Markets. axios.link/3UGrGwA

• Oasis Security, an Israeli provider of non-human identity management solutions, raised $35m in Series A extension funding from insiders Accel, Cyberstarts, and Sequoia Capital. oasis.security

• Peregrine, an SF data integration platform for state and local governments, raised $30m in Series B funding. Friends & Family Capital and Fifth Down Capital co-led, and were joined by insiders Goldcrest Capital, Craft Ventures, and Godfrey Capital. peregrine.io

• Thintronics, a Berkeley, Calif., maker of insulators for electronic applications, raised $23m in Series A funding from Maverick Capital and Translink Capital. hinktronics.com

🚑 Vitestro, a Dutch autonomous blood drawing startup, raised €20m. Sonder Capital and NYBC Ventures co-led, and were joined by Invest-NL and the EIC Fund. vitestro.com

🚑 GroundGame.Health, a startup linking community-based organizations with health plans and providers, raised $17m and merged with patient engagement company SameSky Health. 7wire Ventures led, and was joined by insider Elevance Health. axios.link/44lUTzW

⚡ LiNova Energy, a Monrovia, Calif., developer of polymer cathodes for batteries, raised $15.8m in Series A funding. Catalus Capital led, and was joined by Saft. linovaenergy.com

• Ansa, an SF service for merchants to offer branded virtual wallets, raised $14m in Series A funding. Renegade Partners led, and was joined by Bain Capital Ventures, BoxGroup, and Wischoff Ventures. axios.link/4ddCxp3

• Screenverse, a New York provider of monetization and ad management solutions for digital-out-of-home media owners, raised $10.5m led by Volition Capital. screenversemedia.com

• DeepKeep, an Israeli provider of trust, risk, and security management solutions, raised $10m in seed funding led by Awz Ventures. deepkeep.ai

• Numeric, an SF accounting automation startup, raised $10m in seed funding from Founders Fund, Menlo Ventures, 8VC, Long Journey, and Friends & Family Capital. numeric.io

• Swap, a supply chain logistics SaaS for DTC retailers, raised $9m in Series A funding, per Axios Pro. QED Investors led, and was joined by Cherry Ventures, 9900 Capital, and 2100 Ventures. axios.link/4dino5N

• Zeck, a software platform for board meetings co-founded by Edward Norton, raised $7.5m. Salesforce Ventures led and was joined by Khosla Ventures, Breyer Capital, and Brian Sheth. axios.link/3JGcY2k

• Baselayer, a business banking fraud prevention startup, raised $6.5m in seed funding, per Axios Pro, from Torch Capital, Afore Capital, Founder Collective, Picus Capital, and Gilgamesh Ventures. axios.link/3WitKvS

• X10, a London hybrid crypto exchange, raised $6.5m from Tioga Capital, Semantic Ventures, Cherry Ventures, Sarkware, and Cyber Fund. x10.exchange

• Baxus, a marketplace for collectible spirits, raised $5m in seed funding. Multicoin Capital led, and was joined by Solana Ventures, Narwhal Ventures, and FJ Labs. baxus.co

• BriskPe, an Indian cross border payments company, raised $5m from PayU. axios.link/3wdhDWm

• Seam, an AI interface for customer data, raised $5m in seed funding from Colle Capital, F7 Ventures, Ritual Capital, and Umami Capital. getseam.ai

• Deltia.ai, a German process analysis platform for manufacturing, raised €4.5m in seed funding. Cavalry Ventures led, and was joined by insider Merantix. deltia.ai

• Insane Cyber, a San Antonio industrial cybersecurity startup, raised $4.2m led by Paladin Capital Group. insanecyber.com

• StepSecurity, a continuous integration/delivery cybersecurity startup, raised $3m. Runtime Ventures led, and was joined by Inner Loop Capital, SaaS Ventures, and deVC. stepsecurity.io

🚑 Capitol Pain Institute, an Austin, Texas, portfolio company of Iron Path Capital, acquired Pain Care Surgery of Louisville, an ambulatory surgical center. capitolpain.com

🌎 Climavision, an SF weather forecast provider backed by TPG, acquired Intersphere, a long-term weather forecast service. intersphere.earth

• Emeram Capital Partners acquired CoCoNet, a German provider of corporate banking software. axios.link/49Yb2Ng

• H.I.G. Capital bought USA DeBusk, a Deer Park, Texas provider of industrial cleaning and infrastructure services, from First Reserve. usadebusk.com

⚡ Howard Energy Partners bought the 50% stake it didn't already own in HEP Catalyst InvestCo, an oil gathering and gas processing system in the Permian Basin, from joint venture partner Astatine Investment Partners. axios.link/3wj0Q47

• KKR and Hellman & Friedman are among those seeking a control stake in Nord Anglia, an international private school operator owned by EQT and CPPIB, per Bloomberg. axios.link/4aXgNw1

• KPS Capital Partners is the frontrunner to buy Innomotics, the large motors unit of Siemens that could fetch around €3b, per Bloomberg. Rival bidders include Nidec (Tokyo: 6594). axios.link/4dl36bK

• Mod Op, a Miami portfolio company of Alterna Equity Partners and Spell Capital Partners, acquired LAM Design, a Pleasantville, New York, marketing firm specializing in package design, per Axios Pro. axios.link/4dcqEzs

• RoadSafe Traffic Systems, a portfolio company of Trilantic North America, acquired DCS Pavement Marking, a provider of pavement marking services in Delaware and Pennsylvania, from DeAngelo Contracting Services. roadsafetraffic.com

🚑 Shore Capital Partners acquired PRO-spectus, a Huntington Beach, Calif., provider of market access consulting and patient services. pro-spectus.com

• Southern Home Services, a portfolio company of Gryphon Investors, acquired David Gray, a Jacksonville, Fla., provider of HVAC, plumbing and electrical services. southernhomeservices.com

• TA Associates invested in Edmunds GovTech, a Northfield, N.J., provider of ERP software to local governments. Existing EGT backer LLR Partners will continue to hold a position. edmundsgovtech.com

🚑 WindRose Health Investors bought SubjectWell, an Austin, Texas, clinical trial marketplace. subjectwell.com

• DKV Mobility, a German fleet services firm backed by CVC Capital Partners, shelved plans for a Frankfurt IPO, per Reuters. axios.link/4bfdekw

• Puig, a family-owned Spanish beauty group whose brands include Charlotte Tilbury and Paco Rabanne, raised €2.6b in its Madrid IPO. axios.link/4a2btGc

• Viking Holdings, a cruise operator backed by TPG, raised $1.5b in its IPO. The company priced at $24, within its $21-$25 range, and will list on the NYSE (VIK). axios.link/3Qn1dSb

🚑 Far East Drug Co. agreed to buy a majority stake in Singaporean health care operator Fullerton Health for around $1b from RRJ Capital, per Bloomberg. axios.link/3xYZGey

⚡ Macquarie agreed to sell a 10% stake in East Anglia ONE, a U.K. offshore wind farm, for to renewable energy firm NTR. axios.link/4df25lH

• Tamarix Equity Partners and Pacific General Holdings are weighing a sale of Playa Bowls, an açai bowl chain that could fetch more than $300m, per Reuters. axios.link/3Ukc4xj

• Accor (Paris: AC) is in advanced talks to buy luxury hotel brand Habitas, per Bloomberg. Habitas backers include Abercrombie & Kent, Heritage Group, Unicorn Ventures, Saudi Arabia's PIF, and Jaws Ventures. axios.link/44lHd7Y

• BBVA (Madrid: BBVA) offered to buy rival Spanish lender Sabadell (Madrid: SABE) for around €12b, four years after prior talks collapsed. axios.link/4aZ6RC5

• LVMH is weighing options for the Marc Jacobs fashion brand, after receiving inbound buyout interest, per Bloomberg. axios.link/3xWMeIj

• Perficient (Nasdaq: PRFT), a St. Louis tech consultant with a $1.6b market cap, is weighing a sale, per Bloomberg. axios.link/3JFribl

• S&P Global (NYSE: SPGI) is considering a sale of its mobility business, per Reuters. axios.link/4dhJRQl

• Woolworths (ASX: WOW) agreed to sell a 5% stake in Endeavour Group (ASX: EDV), an Australian liquor store and pub operator it spun out nearly three years ago, for around A$468m. Woolworths retains a 4.1% position. axios.link/3UBM9T3

• Adrena Ventures, a fintech-focused VC firm led by Gideon Valkin (ex-Monzo), raised $12m for its debut fund. axios.link/3WiQk7y

• BlackRock secured up to $5b from Saudi Arabia's Public Investment Fund to invest in Middle East companies via a new, Riyadh-based investments team. axios.link/3K27f7f

• The General Partnership, a VC firm led by Phin Barnes (ex-First Round) and Daniel Portillo (Greylock), is raising its second fund, per an SEC filing.

• Hyde Park Venture Partners of Chicago raised $98m for its fourth fund. axios.link/3xWyZqN

• Ethan Kurzweil has left Bessemer Venture Partners, where he was a partner, to form an enterprise tech-focused VC firm with Kristina Shen (ex-Andreessen Horowitz) and Mark Goldberg (Index Ventures), Axios has learned.

• Jeff Baudier rejoined Bernhard Capital Partners as a senior managing director. Since 2021 he'd been CEO of Core Electric Cooperative. BernhardCapital.com

🚑 Erandi De Silva joined Ohio venture firm Drive Capital as a partner. She previously co-founded Drive portfolio company Forge Biologics. https://axios.link/4a3G6em

• Antoine Dréan left Triago, the European PE fund placement and secondary firm he founded 32 years ago. He will focus on his two other companies, Palico and Mantra Investment Partners. axios.link/4dhG71b

• Charles-Henri Filippi, a top France banker with Lazard, is in talks to join Evercore, per Bloomberg. axios.link/3JFkryH

• Putri Pascualy joined Man Group as a senior managing director and client portfolio manager focused on midmarket private credit and direct lending. She was previously with TPG Angelo Gordon. axios.link/3xUhEie