Article

WHAT IS $50,000 WORTH?

July 23, 2018

 

 

With an investment of $50,000 and a good idea in 2011, Acreage Holdings Inc. (AH) is worth today over $4.9 billion, and it's not even a publicly trading company.

 

Kevin Murphy made a lowly investment in Wellness and Pain Management Connection, a Maine based company that dipped its toe into marijuana healing. By 2013 a significant acquisition program began with wholesale purchasing of targeted commercial and industrial properties in Colorado, Oregon, Washington, and Arizona. With the addition of Dixie Brans, an infused cannabis products company in 2014, AH finalized its primary business model. From 2015 to the present, property and building investments in Maine, New York, and Connecticut, Oregon and Pennsylvania added to their portfolio of related cannabis ventures. Cultivation licenses in Pennsylvania and facilities acquired in Illinois and Florida gave the company depth of breath and management. In the process, AH designed an effective footprint from farming to sales even as the recreational cannabis market in the U.S. remains off limits on a federal basis. Once the national restrictions are removed, possibly in five years, AH may be the first trillion-dollar cannabis company.

Underscoring the success of its business model is the $119 million private placement announced today and notice to use part of the proceeds to enter the Canada cannabis market. With the sales of these securities, this non-public company has a current implied value of $4.9 billion. A $50,000 investment grew into an inordinate number in a mere seven years.

 

Note: AH plans to list its securities on the Canadian Securities Exchange, a convenient target for U.S. marijuana companies looking to attract shareholders. At present, the Toronto Stock Exchange, Canada's most prominent, excludes U.S. marijuana companies from listing on it.

 

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