Marijuana operator Acreage Holdings announces landmark $119 million funding

Just Released! Get realistic market forecasts, state-by-state insights and benchmarks with the new 2024 MJBiz Factbook member program, now with quarterly updates. Make informed decisions.

Image of $100 bills

(This story has been updated from an earlier version.)

New York-based Acreage Holdings appears to have set a record for the largest private funding round ever closed by a U.S. cannabis company, raising $119 million to bankroll acquisitions and list its shares on the Canadian Securities Exchange (CSE).

The vertically integrated, multistate company’s Series E raise surpasses what previously was believed to be the largest private U.S. funding: a $100 million raise by Seattle-based Privateer Holdings in January.

Acreage’s announcement Monday – combined with Tilray’s successful initial public offering on the Nasdaq last week – underscores that investors remain bullish on the marijuana industry’s prospects.

In fact, cannabis funding deals have grown considerably over the past couple of years, according to Scott Greiper, president of Viridian Capital Advisers.

In the first quarter of 2016, the average raise was $1 million, he said. Compare that to the first quarter of 2018, when the average jumped to $14.2 million.

Acreage’s funds were raised from a broad selection of high-net-worth individuals and family offices in the United States, Canada and other overseas markets, Acreage Holdings President George Allen said during a conference call with reporters.

Allen and Acreage’s CEO and founder, Kevin Murphy, declined to disclose the valuation of the company based on the funding.

Acreage owns or operates marijuana cultivation, processing and retail licenses in 13 states and, according to Murphy, is “keenly focused” on expanding operations to states with strong cannabis markets – namely, Arizona, Nevada and Michigan.

“This gives us an exceptionally strong investment proposition to bring into the public markets in our upcoming listing,” Murphy said of the funding in a news release.

He added that the company is planning to list on the CSE because of “the positive reception that the Canadian institutional investment community has shown to the U.S. cannabis industry.”

However, Allen said Acreage is not currently pursuing operating licenses in Canada.

Acreage was given a boost in April when former U.S. House Speaker John Boehner and former Massachusetts Gov. Bill Weld joined its advisory board. Both are Republicans, and Boehner had been a vocal opponent of marijuana before changing his position on the plant.

Allen said media attention around Boehner, Weld and Acreage Holdings created a “tremendous amount of inbound interest” from investors.

As a result, the company was oversubscribed for the round, which raised $50 million in only 10 weeks.

“Cannabis is a capital-intensive business,” Allen said. “So not only do we require the $119 million we raised in this round for the build-outs in our various states, we (also) have capital needs going forward.

“So that’s the whole point of accessing the public markets.”

Allen noted Acreage Holdings was relatively unsuccessful at cracking through the institutional investment base in the United States.

“I think there’s still some reticence to invest at the institutional levels, specifically pension funds or pension-fund backed investment vehicles,” he said.

“The reason for that largely remains that there’s an issue in the United States around banking prohibitions and the notion that an investment into Acreage Holdings can have downstream implications for whatever pension fund or investment vehicle that invests in us for the rest of their business.

“Until that gets cleaned up, our expectation is for the most part institutional investors will be sidelined from this opportunity.”

Joey Peña can be reached at