Dan Bilzerian, founder and CEO of Ignite International Brands, which managed to lose $50 million USGETTY IMAGES
Dan Bilzerian, the trust-fund kid turned-poker player-turned-Instagram celebrity turned-cannabis-sector entrepreneur, is preternaturally good at spending money.
Significant time and resources are invested to remind the world of this, so, here. Check it out. An expensive thing. Too subtle? Here: see Bilzerian, posing near a physical stack of money. He does this often, when he is not photographed on, near, or under a stack of models. Sometimes he combines the two. Anyway, here is some more. Just a few racks, lying around the house!
Such displays are modest. Bilzerian is holding back. Nowhere on his social-media feeds do you see Bilzerian lighting $50 million on fire, which is what the vaguely cannabis adjacent company he founded and serves as CEO, Ignite International Brands, Ltd., did last year.
According to the company’s annual report, filed last month at the Canadian Stock Exchange, where shares of Ignite are publicly traded, the company posted $67 million in losses in 2019.
(All figures in Ignite’s annual report are in Canadian dollars. And $67 million in Canadian dollars is about $50 million US, according to the latest exchange rate. All figures throughout the rest of this article are in Canadian dollars.)
How did Ignite manage to torch so much money? And aside from Ignite’s investors, and the institutions that offered the company’s line of credit, whose money was it?
Linda Menzel, Ignite’s general counsel, who is listed as the contact on company press releases, did not return several emails seeking comment for this story.
But the company’s annual report speaks volumes. So let’s hear what it has to say.
Ignite “made” money in two ways last year. The company issued and sold shares of its company stock, and the company also raised money via debt.
As per its annual filing, Ignite recorded $25 million from “proceeds of issuance of shares,” $19.9 million from “convertible debt,” and $23.7 million from a “short-term promissory note.”
That is, Dan Bilzerian’s company has (had) a lot of other peoples’ money.
With that money, Ignite went on a spending spree, even as its stock tanked.
The company claims to operate in Mexico, Canada, Ireland, and the United Kingdom as well as the United States, where Ignite-branded CBD products are supposedly available in stores.
In addition to CBD-infused toothpicks and nicotine vape juice, Ignite markets water, vodka, and clothing.
(Pointless anecdote: I cover weed and CBD for a living. I live in an area absolutely saturated with CBD products. And I do not think I have ever seen an Ignite product out in the wild.)
Ignite hosted lavish parties, threw events, and did all kinds of stuff a company flush with cash does. Parties with platoons’ worth of models are expensive!
In 2019, Ignite lost $43 million on operational costs alone, mostly marketing and promotion, leases on offices, and compensation for staff and executives.
Posting fat losses isn’t entirely unheard of for early stage companies in Silicon Valley, but what is uncommon is how bloated and profligate Bilzerian’s company managed to become in less than one year.
Keep in mind that the company became publicly traded only on Feb. 28, 2019, when Ignite went public on the CSE via a reverse take-over with an almost-dormant metal-trading firm called ALQ Gold, which inexplicably decided to give up on mining and embrace weed, according to filings.
But what a year it was. In 2019, Ignite’s budget for “marketing and promotion” was $22.26 million, or more than twice what the company managed to register in sales revenue.
For every dollar in sales ($9.6 million) the company spends almost two dollars on general and administrative costs ($18.4 million).
This may offer the best explanation yet for how Bilzerian funds the lifestyle, for which he is famous, fame which in turn funds his lifestyle—the “perpetual status machine” at which he is (for now) the center, as VICE put it in 2015.
Published: July 07, 2020
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