SodaStream CEO Birnbaum joins bubbling medical cannabis race
In his second medical cannabis-related investment in a matter of weeks, Birnbaum will invest NIS 2 million ($550,000) in Israeli home cultivation start-up Seed.
By EYTAN HALON SodaStream CEO Daniel Birnbaum with the cast of the company's new campaign.(photo credit: SODASTREAM)
SodaStream CEO Daniel Birnbaum certainly knows how to grow a company, having recently completed the sale of the Israel-based carbonated drink-maker to PepsiCo for $3.2 billion.Now, Birnbaum – who continues to head SodaStream after the acquisition – is increasingly focusing on another type of growth: medical cannabis.In his second medical cannabis-related investment in a matter of weeks, Birnbaum will invest NIS 2 million ($550,000) in Israeli home cultivation start-up Seedo, the producer of the world’s first artificial intelligence-powered indoor cannabis growing machines. Following the investment, Birnbaum will join the company’s board of directors.At the end of 2018, Seedo, which holds a medical cannabis R&D license from the Israeli Health Ministry, delivered its first 50 pre-sale home-grow units to customers in California. The company expects 3,000 systems to be operational by the end of June.The system, remotely controlled by a smartphone application, allows users to receive real-time information about the plant and watch its growth via video.Birnbaum’s addition to the company board, Seedo CEO Zohar Levi said, will “provide momentum for expansion into new markets,” especially as the medical benefits of cannabis are being increasingly recognized worldwide.In January, the Israeli government approved exports of medical cannabis to the worldwide legal market, which is expected to soar in value from $8.3b. in 2017 to $28b. by 2024. Export licenses will be exclusively granted by the Health Ministry and will require police approval.Only last week, Birnbaum joined a group investors, led by Israel Canada Group owner Barak Rosen, investing NIS 24m. ($6.63m.) in Tel Aviv-based cannabis cultivation company Cannbit in return for more than 52% of the company’s equity.Birnbaum will hold approximately 5% of shares in the GMP-certified company, which boasts a 4,000 square-meter greenhouse growing facility in the Arava moshav of Neot Hakikar. The company also has an additional 10,000 square-meters available for expansion.In December 2018, Cannbit announced that it had secured an agreement to produce NIS 4.8m. ($1.32m.) worth of cannabis for Tikun Olam, one of Israel’s leading licensed producers of medical cannabis.
According to a document issued to SodaStream shareholders in September 2018, PepsiCo considered the retention of Birnbaum and other company executives as “key to the success of the merger” and accordingly developed a cash and equity retention program to ensure business continuity.Following the completion of the acquisition in December 2018, US-born Birnbaum is set to earn $4 million in time-based cash awards, $10m. in time-based equity awards vesting over the next three years, and up to $20m. for performance-based equity awards over the same period.
