Marijuana Business Magazine February 2019

Marijuana Business Magazine | February 2019 12 BIG HITS TILT Holdings Closes $147 Million in Private Placements TILT Holdings in late November closed a $119 million brokered private placement and $28.1 million nonbrokered private placement as part of its planned four-way merger of Baker Technologies, Sea Hunter, Briteside Holdings and Sante Veritas Holdings that led to TILT’s creation. Cura Partners Inks $75 Million Private Placement Cura Partners, an Oregon-based extracts firm, closed a $75 million private placement that included investors from across multiple countries. The deal marks one of the largest raises inked among branded product cannabis companies. OG DNA Genetics Secures $35 Million Raise Los Angeles-based OG DNA Genetics raised a total of $35 million through two initial equity financing deals. The company said it plans to use the proceeds to expand its operations in California, where it manufactures and distributes its branded DNA indoor-grown flower, pre-rolled joints, vaporizer cartridges and concentrates. Number of Note: $13.8 billion North American cannabis companies raised more than $13.8 billion in 2018, according to Viridian Capital Advisors, as U.S. businesses worked to grow their domestic footprint and Canadian firms expanded internationally. being said, in the first dot-com meltdown, I got melted down pretty bad, and I learned a valuable lesson: If you don’t understand the industry and the stocks you’re investing in, you’re not really investing, you’re gambling. A hot market can get your emotions involved when what you really need is cold, critical analysis to take out the emotion. One way to do that is to become an expert in the industry you’re investing in. What’s your top tip for best judging the credibility of valuations? That’s a two-part answer. First of all, you need to ensure you can validate the credibility of the numbers being provided to you. (When it comes to) companies providing historical financials: If these aren’t audited, you need to make sure they’re accurate. If they’re providing forward projections on growth, you need to make sure what they’re projecting is feasible and dovetail with the growth of their operating jurisdictions. Secondly, once you have established that you can rely upon the financial reporting, then you have to compare the valuation to other peers in the market. If one company is reporting they’re worth a substantially higher multiple to earnings than all the other companies in the industry, this should affect your perception about the credibility of the valuation being sought. You might also check to see whether other recognized capital providers have partici- pated in the round you’re considering, as sometimes other credible organizations signing off on a valuation provides some oversight to your own decision making. What products or sector are you most excited about? The market I am most excited about globally is the U.S. cannabis industry. The product I am most excited about is nondilutive royalty financing, which I believe will play a meaningful role in the expansion of the U.S. cannabis industry. Within that industry, I have sector biases toward upstream product categories supported by strong brands and augmented by established distribution channels. What trends concern you most about the industry now? I’m an optimist, and I only see positive trends right now. I see the inevitability of sensible cannabis reform in the United States. I see the cannabis industry gaining traction in pretty much all international jurisdictions that have something resembling a democratic government. I see the medical market quickly turning into an advanced targeted formulation market with verifiable efficacy. Finally, I see the recreational market exploding to encom- pass a wide array of consumer-packaged goods that will fundamentally and forever change human consumption behavior on a global scale in a positive direction. This interview has been edited for length and clarity.