- By Jeff Ostrowski Palm Beach Post Staff Writer
In another sign that medical marijuana is going mainstream, pot purveyor Surterra Wellness said this week that William “Beau” Wrigley Jr. took a significant stake in the company.
Wrigley, a billionaire who lives near North Palm Beach and once ran his namesake candy company, led a $65 million investment in Surterra. He also joined the company’s board.
As Americans increasingly allow marijuana to move into the formal economy, the cannabis industry is seeing a green rush. Even before Wrigley’s announcement, out-of-state investors had poured more than $140 million into Florida’s cannabis companies over the past year.
California, Massachusetts and Nevada are among the states that have fully legalized weed, and major states such as Florida, Illinois and New York have approved medical marijuana in recent years. Even deep-red states such as Texas and Georgia now allow the medical use of cannabidiol, the non-euphoric ingredient in cannabis known as CBD.
Despite shifting public opinions, blue-chip investors have been reluctant to make bets on pot. Many of the backers of U.S. marijuana companies have invested through tangential routes such as Canadian penny-stock companies.
For an industry still seeking mainstream acceptance, Wrigley counts as a major coup. He is former head of the iconic chewing gum company, making him the rare big-name investor to publicly take a stake in the budding pot industry.
“It’s a marquee investment for the entire industry,” said Jake Bergmann, Surterra’s founder and chief executive.
Marijuana experts expect others to follow.
“It’s emblematic of a whole wave of private capital coming into the industry,” said Tom Adams, managing director of BDS Analytics, a company that tracks the cannabis sector. “There are so many private investors right now either fully engaged or exploring the market. This is just one of what’s going to be a steady stream.”
Wrigley, for his part, pointed to pot’s promise as a medicine.
“After extensive diligence, we determined that Surterra has the highest quality standards, best products and most professional management team in the industry,” Wrigley said in a statement. “We believe in the ability of cannabis to improve quality of life for patients across the country, and we are excited to build a global industry leader for the long term.”
Surterra is one of 14 companies licensed by the state of Florida to sell medical cannabis. Surterra runs 10 dispensaries in the state, including locations in Miami Beach, Orlando, Tampa and Jacksonville.
Wrigley, who runs an investment company headquartered in Palm Beach Gardens, is the former chairman and chief executive of the Wm. Wrigley Jr. Co., the maker of chewing gum and candy. His great-grandfather launched the company in 1891. In 2008, the Wrigley Co. sold to privately held Mars Inc.
Wrigley, 54, is worth $2.9 billion, according to Forbes. In addition to running his investment company and family office, Wrigley is president of Wychwood Asset Management LLC. He first invested in Surterra in September but made his stake public this week.
Florida’s cannabis industry has been growing quickly. As of Friday, 144,557 patients had won permission to buy marijuana through the state’s pot program.
Even so, the cannabis industry remains hamstrung by federal prohibition and by the medical community’s skepticism.
“When I understood the massive benefits, it really changed my mind about the industry,” Wrigley told Bloomberg. “You don’t see too many opportunities to have that kind of an impact in an industry that is being created from scratch.”
Surterra says it has raised $100 million since 2015. It plans to conduct clinical research trials to study cannabis as a treatment for anxiety, pain and post-traumatic stress disorder.
It’s just the latest Florida marijuana company to elicit interest from investors, who have been upping the ante as they seek a foothold in Florida’s growing ganja market.
Liberty Health Sciences, a publicly traded company in Toronto, last summer bought Chestnut Hill Tree Farm of Alachua County for $40 million.
In January, iAnthus Capital Holdings announced a $48 million deal for GrowHealthy Holdings of Lake Wales. iAnthus is based in New York but trades on a Canadian stock exchange.
And in June, MedMen of California paid $53 million for Treadwell Nursery of Eustis.
All of those investors specialize in cannabis, but with his mainstream sensibilities and instant name recognition, Wrigley brings something besides cash.
While Wrigley isn’t the first blue-chip investor to put money in the U.S. cannabis industry, he’s one of the first to make a public splash, said Debra Borchardt, chief executive of the cannabis news site Green Market Report.
“Certainly some of that old family money has been reluctant to put their name out there,” she said. “There’s still a lot of stigma.”
In Wrigley’s case, he no longer runs a publicly traded company, which gives him flexibility to make unconventional investments.
“He doesn’t have to answer to anybody,” Borchardt said. “His wealth isn’t dependent on other people.”
Serge Chistov, a Colorado-based financial consultant to the cannabis industry and an investor in Honest Marijuana Co., said early investors like Wrigley stand to make outsized returns. While the tech sector and other mainstream industries are awash in capital, cannabis companies still struggle to find traditional financing.
As a result, Chistov said, brave investors can hope to bank big profits.
“It’s a transition from the dark corners of the black market and cartels to a more predictable and understandable type of capitalist operation,” Chistov said. “It becomes no different to grow broccoli than to grow cannabis.”