AUSTIN (Austin Business Journal/ KXAN) — An Austin-based cannabis testing company is in the final stages of raising a $5 million series A funding round at a $20 million pre-raise valuation, mere weeks after Gov. Greg Abbott signed two new cannabis bills into law.
The Austin Business Journal reports Ionization Labs bills its product, a hemp and marijuana testing solution called Cann-ID, as “the first affordable, highly scalable, accurate and simple to use turn-key in-house testing solution,” according to the company’s website.
The company’s latest funding round is led by New York-based Merida Capital Partners, which along with its affiliates is expected to inject about $3 million of new capital into Ionization Labs. Potential candidates who might be interested in Cann-ID include Texas law enforcement agencies grappling with the tall task of differentiating legal hemp from still-illegal marijuana.
After Texas lawmakers passed the two bills in the past legislative session, several large counties including Travis County, said it will no longer prosecute people who were caught with small amounts of marijuana. The crux of the problem for prosecutors was that both hemp and marijuana are cannabis and it would be too difficult and too expensive to test the substances to prosecute.
State leaders were quick to respond to the decision not to prosecute low-level pot crimes with a statement saying, “Marijuana has not been decriminalized in Texas, and these actions demonstrate a misunderstanding of how H.B. 1325 works.”