Cannabis Company Backed by Retail Fortune Eyes East Coast Expansion
(Bloomberg) -- A cannabis company backed by the retail fortune of Ohio’s Schottenstein family has raised about $65 million as it prepares to be publicly traded in Canada.
Green Growth Brands, which is run by former Victoria’s Secret and American Eagle Outfitters Inc. executive Peter Horvath, has purchased an existing marijuana operation in the Las Vegas area and is looking to get licenses to operate in Massachusetts, Florida and New Jersey. The new funding round included investments from the Schottensteins and Horvath, and precedes a stock listing in Canada in coming weeks through a reverse takeover.
Green Growth, based in Columbus, Ohio, was started in March, with backing from the Schottenstein family, who, in addition to real estate holdings, are part owners of the shoe retailer DSW Inc. and teen clothing chain American Eagle Outfitters. Jay Schottenstein is the chairman of both companies and is chief executive officer of American Eagle.
Green Growth is focused on the burgeoning cannabis retail market in the U.S., with Horvath banking on his experience selling underwear and apparel to help drive growth as marijuana goes mainstream.
“There are some critical differences, but 90 percent of what customers experience and what they expect is the same,” Horvath said, comparing marijuana to the products sold by his former companies. “There’s a lot of interest in leveraging our skill set.”
Over the summer, Green Growth agreed to buy Xanthic Biopharma, an existing public company based in Toronto. Part of the funding round is going towards Xanthic’s acquisition of a Las Vegas cannabis operation that includes a retail store, a grow operation and distribution license. Once the deal with Xanthic closes, Green Growth will be publicly traded in Canada, Horvath said. The company is applying for additional licenses to operate in Nevada.
Horvath, 60, said cannabis had not previously “been part of his lifestyle” but that he was intrigued by the opportunity to bring the lessons he learned in retail to an industry that is just getting off the ground. He’s noticed a lot of Wall Street veterans showing up now that the investment boom is on, and while bankers are good at raising money, he thinks retail experience will be key as more and more states legalize cannabis.
“They’re intelligent, but they don’t know what they don’t know,” he said. “We know how to compete for consumer and win.”
©2018 Bloomberg L.P.