California Cannabis Accelerator Finds New Financial Backing

Jun Hong Heng, Managing Director of Crescent Cove Capital, which is backing Gateway
Jun Hong Heng, Managing Director of Crescent Cove Capital, which is backing Gateway

Oakland-based Gateway Incubator launched last November, with initial funding provided by MJIC.  The size of the investment was never disclosed, but it was intended to cover up to $600K of investments into cannabis startups as well as initial operating costs. The two companies have parted ways, as MJIC attributed the move to a change in its focus.

The Gateway/MJIC partnership was consummated just prior to MJIC’s shift from an investment company to an operating company. As a result, over the past 4 months we have been unable to deliver the support to Gateway that we originally expected.

david friedmanDavid Friedman, CEO of MJIC

In order to pave the way for more qualified investors and partners we felt the best course of action was to step aside and relinquish our interest. We are big fans of Carter, Ben and the mission that Gateway represents, and we will continue to use the resources at our disposal to assist them in their mission to service the industry.

Gateway found a new investor in Crescent Cove Capital, which also provides ties to Silicon Valley and has helped bring in additional capital.  In addition, Gateway has partnered with law firm Morgan Lewis to provide it legal counsel as well as to the companies within the incubator. Finally, it has added John Stockdale, an early Facebook engineer, as Entrepreneur-in-Residence.  According to Co-Founder and Managing Partner Ben Larson, Stockdale is helping the companies in the incubator by “giving them feedback on their technical approach and the metrics in which they choose to track.”

The incubator, which fielded 150 applications for its first class, selected eight companies, two of which actually deal directly with cannabis, including an edibles brand out of Los Angeles that has relocated to Oakland and a tech-driven MLM company.  The other six are ancillary technology companies, including one from Toronto, one from Michigan and four from the Bay Area. It has also launched Gateway Works, a coworking space exclusively for emerging cannabis companies.

Breaking News by Alan Brochstein, CFA
Alan Brochstein, CFA
Based in Houston, Alan leverages his experience as founder of online community 420 Investor, the first and still largest due diligence platform focused on the publicly-traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. At New Cannabis Ventures, he is responsible for content development and strategic alliances. Before shifting his focus to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst following over two decades in research and portfolio management. A prolific writer, with over 650 articles published since 2007 at Seeking Alpha, where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source to the media, including the NY Times, the Wall Street Journal, Fox Business, and Bloomberg TV. Contact Alan: Twitter | Facebook | LinkedIn | Email

Get Our Sunday Newsletter