Employees and investors had high hopes for Civilized. Samantha Lee/Business Insider
- Civilized Worldwide, a cannabis media startup, raised $7 million to create the “premium lifestyle and media brand” for cannabis consumers around the globe.
- With investments from high-profile backers like the comedian and author Chelsea Handler and Canopy Rivers, the venture arm of Canopy Growth, Civilized and its husband-and-wife founders were soaring as cannabis legalization looked poised to sweep the US a few years ago.
- But after a series of layoffs and business pivots, as well as a failed takeover attempt, Civilized has let go of all of its staff and suspended operations.
- Civilized’s management team told Business Insider they were in negotiations to restructure their debt and bring on new investors for a relaunch.
On September 20, 2018, Derek Riedle, then the CEO of Civilized Worldwide, a cannabis media startup, was set to embark on a tour.
He had just boarded a jet with the comedian Chelsea Handler at Van Nuys Airport in Los Angeles, a popular spot for celebrities and wealthy executives.
The pair were heading to Calgary, Alberta, the first stop on a tour of seven Canadian cities where Riedle and Handler held town-hall-style events with thousands of people. Canada had just legalized cannabis, and the excitement was palpable.
Riedle, along with his wife, Terri Riedle, had built Civilized into one of the more successful media-and-events brands in the burgeoning cannabis industry. The company attracted a slew of writers and videographers who wanted to document what many viewed as one of the greatest social and policy transformations of the 21st century.
The excitement helped the company pull in $7 million from prominent investors like Canopy Rivers, the venture arm of the biggest cannabis company, and celebrities like Handler. By spring 2018, former employees said the company had even taken steps to go public and touted its ability to reach over 2 million people per month.
But a little more than a year after the Riedles toured Canada with Handler, they were closing up shop at Civilized.
By December 2, Civilized had laid off all of its employees and suspended operations after the startup ran out of runway. A deal to sell the company and resume publishing was beginning to unravel too.
While the layoffs have been made public, Business Insider is the first to report on the collapse of Civilized’s deal with New Frontier Data, as well as its negotiations to restructure its debt. This story is based on conversations with five former employees and four freelancers, as well as email threads and internal memos obtained by Business Insider.
Civilized found itself at the intersection of two collapsing bubbles: cannabis and digital media. In both cases, early hype convinced investors to pour in cash, but growth didn’t materialize as quickly as investors had hoped.
“The last year or so in the world of digital media and cannabis has been unbelievably challenging, to say the least,” Terri Riedle said in an email after Business Insider sent a detailed list of questions outlining the issues former employees and freelancers had with Civilized. Riedle said Civilized was still working to resume publishing.
In some ways, Civilized is emblematic of the cannabis industry’s struggles — the coronavirus notwithstanding — over the past few months, where the outsize ambitions on the part of investors and management don’t reflect what is feasible for a startup to do.
Chelsea Handler and Derek Riedle on their way to Calgary, Alberta, for the Civilized Conversations series. Instagram
Former employees of Civilized told Business Insider that the tour with Handler symbolized the startup’s troubles. The Riedles had big plans for Civilized but often lacked the resources, time, and skills to see them through.
The tour, for instance, was successful in terms of ticket sales but expensive to produce — especially with the fees that a high-profile celebrity like Handler commanded. And it didn’t become the content opportunity Derek Riedle had hoped for, as the startup did not end up with much usable footage to turn into a documentary for a platform like Netflix or a video blog series for YouTube, former employees said.
“Derek was trying to build up his celebrity, which was sort of foolish,” a former senior employee who worked at Civilized from 2016 to 2019 said. There was a constant “blurry line” between Derek Riedle wanting to be an influencer, palling around with celebrities, and doing the work he needed to do as CEO, the employee said.
The beginnings of Civilized
Derek and Terri Riedle started Civilized in 2015, shortly after Colorado became the first US state to legalize marijuana for recreational use. Investors and entrepreneurs hoped Colorado’s move would catalyze a multibillion-dollar industry.
The digital-media startup had ambitions to be the “premium lifestyle and media brand” for modern cannabis consumers. Think High Times for the upwardly mobile professional, those that enjoy a toke or two after long days of working at a tech startup or in a creative job.
The business model in the early days was simple: Civilized would post original and branded content and sell ads to cannabis companies.
The Riedles also ran Revolution Strategy, a marketing firm, and had enough business acumen to see early on that legal cannabis could be huge — and that as a media company, they could avoid some of the challenges facing companies that sell and cultivate marijuana. (The Riedles left Revolution Strategy in January after the company was taken over.)
On top of digital content, Civilized also has an events business, which includes the Civilized Games, an athletic competition where athletes compete while high, and the yearly World Cannabis Congress. It also bought the Moonlight Bazaar, an art and music festival in Saint John, New Brunswick.
Fresh investment and new hires
By the middle of 2018, the Riedles had become mainstays of the cannabis-conference circuit and courted favorable press. Derek Riedle had appeared on stage with celebrities like Handler and Martha Stewart, as well as cannabis execs like Bruce Linton, the founder of Canopy Growth, the largest cannabis company by market value.
The company received fresh investment from Canopy Rivers in April 2018. That year, Civilized hired a lot of people, creating excitement in its home city of Saint John, a Maritime town desperately in need of jobs and tax-revenue-generating companies, James McClure, a former Civilized employee who was laid off last July, told Business Insider.
Former employees estimated the company peaked in mid-2018 with more than 30 employees, though there was constant turnover, as is typical for growing startups.
Civilized also tried to make a string of acquisitions in 2018 and 2019, including the 420 Games, an athletic-events company that combines sports with marijuana, and Business of Cannabis, an online news, events, and analysis platform for the Canadian cannabis industry. The Business of Cannabis deal didn’t end up closing.
McClure worked on the editorial side of Civilized from August 2015 to July 2019, first as an associate editor and then as head of the content team in Canada.
Published: July 13, 2020
The post The downfall of Civilized, a cannabis media startup that raised $7m, then had to shut down appeared first on L.A. Cannabis News.
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