It’s not often that entire industries spring up over the course of a few years, let alone ones that become incredibly profitable.
This paradigm shift comes courtesy of the newly budding cannabis industry, and Herb is the latest to cash in, announcing a $4.1 million USD seed round late last month.
The Toronto-based cannabis media and tech company saw a long list of credible investors, led by Lerer Hippeau Ventures, a firm helmed by the founders of Huffington Post, Thrillist and Now This. Additional funding came from Slow Ventures, Liquid 2 Ventures, and Shopify’s CEO Tobi Lutke and COO Harley Finkelstein, among others.
Herb is a well-known media company dealing with anything cannabis related. They have over 200 million video views, nine million Facebook likes and over four million unique website visitors a month. Some of the new funding will go towards building out content for the media aspect of Herb but the majority will go towards a new endeavour.
“I believe cannabis will be larger than alcohol in the next 10 years,” states Matt Gray, founder and CEO of Herb. “By 2020 cannabis will be worth $23.1 billion. When I looked at the data and looked at the trends, it seemed there was no better use of my time then to start an impactful business in the cannabis industry. This industry is blowing up.”
With incoming legalization from Canada next year, and a slowly-but-surely approach from the U.S., cannabis is turning into a massive market with as-of-yet untapped potential. Herb wanted to be more than a media platform—it wanted a digital approach as well.
The company will launch their app later this year and boast features that will appeal to everyday smokers and once-a-monthers alike. Herb’s platform will have a strain indicator, individual user profiles and access to the massive community the company has grown online. There will also be a dispensary locator added a little after launch.
Strains will have reviews from both professionals and users, and you will be able to find cannabis that helps with creativity, arousal, pain, anxiety and more. This will be at the core of the new app’s value to both newbies and seasoned vets.
“We have the largest focus group of cannabis consumers in the world,” says Gray. “Millions use Herb every month, and all that data can be used to help people around the world make smarter decisions around cannabis.”
Gray also knows that there will be a cloudy area in terms of regulation, especially because 70 per cent of Herb’s user base is from the U.S., while only 12 per cent is Canadian.
“Whether it’s San Jose or Toronto, our job is to follow the regulations. They come out and we work closely to always make sure we’re on the right side of the law,” says Gray. “At a high level, we’re looking to be stewards of this industry. The companies in this space have a responsibility to consumers, the government, and their community to deal ethically and work with the law.”
Herb is one of many companies rooted in the cannabis industry to receive funding from major VCs. As regulations fade, more companies will start to see even larger amounts of money thrown their way.