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article imageHeir to the Jim Beam bourbon fortune enters cannabis industry

By Karen Graham     May 16, 2018 in Business
Ben Kovler is the great-grandson of Harry Blum, who invested in Jim Beam after the end of Prohibition. And like his great-grandfather, Kovler is taking a chance on a product that is illegal and investing in Canada's soon to be legal pot industry.
Kovler is the founder and chairman of Green Thumb Industries (GTI), a national cannabis cultivator, processor and dispensary operator, with its headquarters in Chicago, Illinois,
Founded in 2014, GTI has seven manufacturing facilities and 45 retail locations across six highly regulated U.S. markets. The company employs more than 300 people and serves hundreds of thousands of patients and customers each year.
In a press release dated May 14, it was announced that Bayswater Uranium Corporation and GTI Industries have confirmed an announcement by Bayswater on April 23, 2018, that a reverse takeover of Bayswater by the security holders of GTI would take place. The Letter of Agreement was negotiated at arm’s length.
Canadian Prime Minister Justin Trudeau predicts other countries will follow Canada's lead in le...
Canadian Prime Minister Justin Trudeau predicts other countries will follow Canada's lead in legalizing cannabis
Lars Hagberg, AFP
"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," said GTI Chief Executive Officer Pete Kadens. "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."
Basically, in a reverse merger, a private company like GTI purchases a company already traded on a stock exchange, like Bayswater Uranium. This way, a private company can sell shares to new investors and gain some capital. The reverse merger also avoids the sometimes complex and costly process of going public alone.
Kovler told Bloomberg News he and Kadens are hoping to grow the company quickly before more U.S. markets open up. GTI operates 12 dispensaries in Maryland, Massachusetts, Nevada, Pennsylvania and Illinois, and has plans to expand to Florida. GTI has products in over 100 stores.
GTI posted revenues of over $20 million last year and should exceed $70 million this year, Kovler said. The company also had a successful funding round of $45 million this year and is now turning its eyes toward Canada, where the cost of raising capital is cheaper.
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Loblaw Companies Ltd.
“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 GTI investor Sanjay Tolia, who founded Bengal Capital, a proprietary trading firm. “It’s hard to do that if you’re not public.”
The merger with Bayswater Uranium does not mean GTI will begin cannabis operations in Canada. The deal will give GTI some additional footing in the market. The completion of the proposed transaction is subject to a number of conditions, all culminating on the approval of the Canadian Securities Exchange.
The Jim Beam connection explained
Prohibition in the United States was a nationwide constitutional ban on the production, importation, transportation and sale of alcoholic beverages from 1920 to 1933.
Orange County  California  sheriff s deputies dumping illegal alcohol  1932
Orange County, California, sheriff's deputies dumping illegal alcohol, 1932
Orange County Archives
Jim Beam has been around since 1795, with production interrupted by Prohibition, but seven generations of the Beam family have been involved in its production, from the first barrel of corn whiskey sold in 1795, clear up to today. Instead of just corn whiskey, Beam's products include a variety of fine bourbons, rye whiskeys and liqueurs sold around the world.
Harry Blum, along with Harry L. Homel, Oliver Jacobson, and Jeremiah Beam brought the company back from the Prohibition era with the founding of the James B. Beam Distilling Company in 1935. Harry Blum invested $5,000, a lot of money at that time, in the company.
Harry bought out his his partners for about $1 million in 1941, and in 1967, Blum sold the company for an undisclosed sum.
Kohler sees some similarities between the liquor industry of the 1930s and today’s market for cannabis. Kohler's great-grandfather was far-sighted in seeing the growth potential of Jim Beam, and Kohler feels the same way about cannabis.
More about Cannabis, Canada, GTI, cannabis empire, legal cannabis