Jim Beam Heir Enters Cannabis Industry to end ‘Prohibition 2.0’
The heir to a fortune earned from bourbon during the post-Prohibition era is building a new company in the cannabis industry.
Ben Kovler is the great-grandson of Harry Blum, who invested in the Jim Beam brand after the end of Prohibition. After buying out his partners for about $1 million in 1941, Blum sold the company in 1967 for an undisclosed sum.
Kovler is also the founder and chairman of Green Thumb Industries (GTI). Today, GTI announced they will be acquiring a publically traded Canadian company in what is known as a reverse merger.
In a reverse merger, a private company purchases one already traded on a stock exchange. This allows the private company to sell shares to new investors to gain new capital. The move also avoids the complex and costly process of going public itself.
United States legal restrictions prevent GTI from revealing the name of the company they will be taking over. But High Times has learned that the firm is Bayswater Uranium Corporation.
Kovler stated in a press release that his company is taking advantage of newly legal cannabis markets.
“We believe this is Prohibition 2.0 and brands distributed at scale will win,” he said. “Our business plan is simple: Enter, Open, Scale. The liquidity in the Canadian market will drive down our cost of capital and allow us to execute on our business plan to deliver shareholder returns.”
At this time, GTI does not plan to begin cannabis operations in Canada. Instead, the acquisition gives them access to a new source of capital to expand its operations in the U.S.
GTI is currently operating cultivation centers and seven manufacturing facilities. It also has 45 retail locations in six states. The company’s brands include the RISE chain of cannabis dispensaries in Maryland, Massachusetts, Nevada, and Pennsylvania. The Chicago-based company also plans to expand into Florida soon.
Merger Offers Opportunity for Growth
Pete Kadens is the CEO of Green Thumb Industries. He said that the merger will be an opportunity for both the company and the markets it serves.
“I’m excited for all of us at GTI as we experience a huge milestone and transition from a private company to a publicly traded one,” Kadens said. “In addition to giving back to the communities in which we operate, our priority remains bringing a disciplined and strategic approach to our expansion efforts as we move GTI to the next level. GTI is well positioned to thrive as the cannabis industry matures and we look forward to being among the publicly traded cannabis companies on the Canadian exchanges.”
Sanjay Tolia, one of the investors in GTI, told Bloomberg that the deal shows that the company plans to be a long-term player in the cannabis business.
“A lot of people think this stuff is about liquidity and finding exits, and I firmly believe the bigger opportunity for us is to go to Canada and use that currency to increase our scale,” said Tolia. “It’s hard to do that if you’re not public.”
GTI plans to use new investment gained from the deal to build new facilities while acquiring more licenses in legal cannabis markets.
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