Jack SmithMay 17, 2018
A bourbon heir is betting that the legalization of marijuana in Canada will be similar to the end of Prohibition in the U.S. and lead to untold riches.
Ben Kovler is bringing Green Thumb Industries or GTI public in Canada, according to Bloomberg, due in large part to similarities seen between the liquor industry in the 1930s and cannabis today. Speaking with Bloomberg, Kovler said he intends to bring GTI public via a reverse merger with a publicly traded Canadian company. Kovler, whose family invested $5,000 in the distiller group that would eventually become Jim Beam bourbon, is also the shareholder of GTI
According to the company’s website, Kovler founded GTI in 2014 “and has successfully grown it into a national cannabis cultivation and dispensary operator with 26 licenses across five highly-regulated U.S. markets.” Kovler is also the Chief Investment Officer of an investment partnership that allocates capital across a wide range of industries in both public and private companies. The 39-year-old Kovler believes that GTI can emulate liquor industry heavyweights and move beyond selling marijuana into vaporizer products.
“We’re taking the world from moonshine to cocktails,” Kovler told Bloomberg. “People come in complaining that the moonshine burns their throat, and we say, ‘Here, try this rum and Coke.’ We’re seeking to create an authentic relationship with consumers in the same way that alcohol companies do with hard liquor, beer, and wine.”
Kovler told Bloomberg that he and GTI expect to generate more than $70 million in revenue this year, after surpassing $20 million in 2017, as the company now has its products in more than 100 stores across the U.S.
All of GTI’s locations across the U.S. can be found here.
Kovler added that he expects raising capital will be cheaper in Canada than it is in the U.S., after the company raised $45 million in funding this year, largely from U.S.-based investors. The timing comes just shortly after the Canadian cannabis sector has taken a bit of a hit.
Extreme optimism led to investors bidding up cannabis-related stocks in 2017, especially towards the end, but that bubble burst a bit as investors fretted when Canada would legalize cannabis for adult use. Prime Minister Justin Trudeau and his team have hinted that recreational use could start in the fall, as opposed to July, as had been previously thought.
The sharp corrections seen in Canadian cannabis stocks are indicative of the entire cannabis sector in the first quarter. The Green Market Report Cannabis Company Index fell 21.9 percent in the first quarter, as regulatory concerns, especially in the U.S., weighed on investors’ minds.
