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Why Dan Bilzerian’s Summer Was Worse Than Yours: His Weed Company Is in Turmoil

Chris Roberts | October 12, 2020 | 0 0
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It may be tempting to think that an Instagram celebrity armed with a private jet, a bevy of attractive women at his beck and call, and several armloads of someone else’s money has exactly zero problems. That is how our society trains you to think, and envying someone in this situation is even more compelling in the context of months-long coronavirus-induced isolation.

But at least in the case of Dan Bilzerian, this thinking is wrong. For the CEO of Ignite, a still-nascent and still-inchoate cannabis brand, the COVID-19 summer of 2020 has presented challenges aplenty. And if the last month is any indication, the autumn may be worse.

First came the news in July that Ignite was $50 million in the red, a financial hardship that forced Bilzerian’s company to agree to end the lease on his (rented, by the company) Los Angeles mansion, even as he was yachting around the Mediterranean. Meanwhile, shares in the company tanked, slipping from $1.44 (Canadian) to about $0.36 cents as of most recent trading.

Bad optics and bad business, but the lesson of the year 2020 is that there is no bottom. And so, late last week, news broke that CannMart, a distribution company that moves Ignite-branded product in Canada—where Bilzerian’s firm is publicly traded—was ending its relationship with Ignite.

Keep in mind that Ignite is a consumer-focused brand that doesn’t really seem to sell all that much. The company reported $1.6 million in sales in 2020 in its most recent financial statements—good for only about $600,000 in actual profit.

Add that to the news that Ignite shuffled company leadership again last month—John Schaefer, who recently put in time at cannabis unicorn MedMen, took over as president on Sept. 1, Ignite’s third president since June—and what you’re left with is a picture of a flailing business, sinking further into turmoil. Or whatever this is.

Linda Menzel, the company’s general counsel who is listed as the press contact on Ignite releases, did not return an email seeking comment.

At least with Schaefer, who boasts of stops at grocery chain Wegman’s and pharmaceutical giant Bayer’s agricultural wing in addition to a year at MedMen—itself a bit of an ongoing dumpster fire—there’s some continuity. According to his LinkedIn, Schaefer’s been with Ignite for more than a year, joining the company as chief operating officer in August 2019 following his stint with MedMen, which he departed before the company imploded.

Schaefer took over from Lester Lee, whose term as president lasted just shy of three months. Lee, whose previous ventures include selling something called “energy gum,” remains on the company’s board of directors. And Lee was installed as president in early June, when he replaced Curtis Heffernan.

Heffernan exited on June 8 to “pursue other opportunities,” Ignite initially claimed in a press release. That’s true in a sense, but Heffernan is currently pursuing a lawsuit against Ignite for, among other things, firing him as retaliation for pushing back against what he characterized as Dan Bilzerian’s wanton and wild spending on the company credit card.

Heffernan wasn’t on the job very long himself—he took over from Jim McCormick in November 2019—but he has the distinction of being Ignite’s second-longest tenured president.

Whew! Four presidents in less than a year—what’s next for Ignite, other than searching for the next future ex-president? It’s an excellent question.

If the company is serious about selling branded products—of which it has many, including vodka and water as well as THC and CBD products—it probably wants to start by putting products in front of consumers.

Unless Dan Bilzerian plans on selling $50 million worth of copies of his promised forthcoming book, losing a distribution company is something Ignite may want to rectify sooner rather than later.

 

Sources

Roberts, Chris. “Why Dan Bilzerian’s Summer Was Worse Than Yours: His Weed Company Is in Turmoil.” Forbes, Forbes, 7 Oct. 2020, https://www.forbes.com/sites/chrisroberts/2020/10/07/dan-bilzerians-summer-was-probably-worse-than-yours/#5661cdf3299c.

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