Company plans a public listing on the Canadian Securities Exchange in Q3 2018.
NEW YORK – Acreage Holdings secured $119 million in capital and plans to list on the Canadian Security Exchange (CSE) this fall. Founder and chief executive Kevin Murphy announced the deal on CNBC’s Squawk on the Street. He also responded to questions about the addition of former House Speaker John Boehner and former Massachusetts Governor Bill Weld to the Acreage board of directors in April.
The following is an abbreviated version of the CNBC interview:
CNBC: Why are you listing on the CSE?
Kevin Murphy: That is where we are most welcome today. We would love to be public on the New York Stock Exchange or NASDAQ, but in today’s world Canada is where we’re headed.
[Recreational] pot [will be] legal in October [in Canada]. How does that change Acreage?
When we go public, it offers us a lot of optionality. Or goal is to take that stock and, really, the tangible assets of that stock, and use that to go out and aggregate more of [the U.S.’s] assets in cannabis.
You could have raised more in this round and didn’t. Why not?
We set out to raise $50 million, and when Speaker Boehner joined the board there was so much enthusiasm for the round that in fact we raised $119 million. One of the reasons why we stopped there is it was in fact the largest round ever done in cannabis in the United States. But we also wanted to save some for the [initial public offering] or [reverse takeover]. We could have raised as much as $300 [million] for the round, and that’s the sort of enthusiasm we’re seeing for the space.
Will there be over-capacity?
This industry is expected to be $100 billion in size…
What does that number mean?
That number means… Sales in the United States for the illicit as well as the regulated markets is anticipated by 2025 to be $100 billion in size. Today, the regulated markets capture between $7 [billion] and $8 billion. There is so much room to grow in this space, and that’s why people believe now is the time to get in and that the time to get in is early.
What have Speaker Boehner and Governor Weld been doing on your behalf? Have they made any headway when it comes to opening up regulation in [the U.S.]?
Speaker Boehner and Governor Weld have been a watershed moment for this industry. It’s not only that they have added billions of dollars of value to our firm, but they’ve had a huge impact on the entire industry. Everyone in this industry is doing a lot better now that Speaker Boehner and Governor Weld are part of it.
Are you talking about administration policy…?
It’s all of the above. They really give us a very good roadmap as to how things work legislatively, and they also are compassionate men who have the courage to change their mind about cannabis. That, I believe, really turned a lot of heads, and it’s made others think about why this isn’t the scary drug that’s [categorized] Schedule I with no medicinal value.
How many customers do you expect to be “online” in Canada come October? Can they all be supplied?
The California market is larger than all of Canada, and if you think about the Canadian markets and the United States markets, it’s our goal to bring compassionate care and medicine to the 340 million people in [the U.S.]. We believe that Canada is an exciting time. They have certainly led the charge as it relates to cannabis. But it’s our belief that the United States will soon follow, and we believe that it will be the largest marketplace for cannabis in the world.