Business

What’s Brewing at Province Brands?

avatar Alex Halperin / Jun 4, 2020

This January, entrepreneur Michael Wendschuh pitched investors on what he has described as a $1.2 trillion opportunity: “Our mission at Province Brands of Canada  is to create, for the first time ever, a less harmful alternative to alcohol.”

The product Province touted as the “alcohol killer,” is beer brewed from marijuana. Wendschuh, 43, a Princeton graduate better known by the nickname “Dooma,” said Province was building the “world’s first cannabis brewery,” in Grimsby, Ontario, about halfway between Buffalo, N.Y., and Toronto.

Dooma said Province had raised $20M and planned to raise $20M more. The company has attracted attention from The Guardian, Vice and other leading media outlets in Canada and abroad. It even scored a joke on Late Night with Seth Meyers.

Since starting Province in 2016, Dooma had probably pitched the company hundreds, if not thousands, of times. He blends a casual mastery of the complex subject matter with allusions to Elon Musk and Sumer, a Mesopotamian civilization that pioneered beer brewing around 4000 B.C.  On stage, he wears trim suits and flips through slides packed with gorgeous people, giving his decks the feel of a fashion magazine.  A reporter once described him as the “Tony Stark of Weed.”

A slide from Dooma’s January 2020 presentation

Before Canada legalized cannabis drinks in late 2019, Dooma said Province beers would be available once it could legally sell them. Post-legalization, in January, he didn’t specify when they would reach shelves. The company has announced at least six product partnerships for an array of beverages. As far as I’ve been able to determine, none have gone on sale.

This story on Province’s product development draws on interviews with six individuals familiar with the company’s operations over the past 18 months, including former employees and executives. All but one spoke on the condition of anonymity.

Dooma often said Province sought to “change the world,” but none of the company insiders expressed confidence he would bring its flagship beer to market. Anyone thinking of investing in the company “just needs to ask the right questions, and they will see it is all smoke and mirrors,” a former employee wrote.

Dooma did not respond to questions submitted for this story, nor offer anyone to speak on the company’s behalf. Province’s most prominent investor, a publicly traded company called Auxly, declined to comment, as did other Province investors. One person who has worked with the company emailed, “I believe that Province, if covered fairly, will prove to be a story of an amazing company founded by an incredible entrepreneur, but I shan’t be contributing.”

Before Province, Dooma co–founded another cannabis start-up, Ebbu LLC. In 2014, when I was new to the weed beat, Dooma invited me to “embed” with the company and tell its inside story. I was very happy to accept. With his smarts and charisma, I thought Dooma could be the guy to conquer North America’s fastest growing industry.  It hasn’t worked out that way.

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“A deep desire to be seen as a visionary”

Dooma spent much of his early career in the video game industry, where he helped create the multi-billion dollar Assassin’s Creed franchise. Not long after Colorado legalized recreational marijuana in 2012, Dooma contacted his friend Jon Cooper and the pair co-founded Ebbu in the Denver-area. Ebbu planned to develop a product line called “Feelings,” which would induce specific flavors of high: Energy, Create, Chill, Giggle and Bliss. Dooma told investors it could be done with techniques established in the perfume industry.

It would be difficult to overstate demand for predictable and consistent marijuana. “This category of product could change almost everyone on Earth’s lives,” Dooma told Fusion in 2015. Ebbu’s expertise, he told investors, could also help develop cannabis-based medicines.

To prove the Feelings worked, Dooma said Ebbu would hold trials where human subjects would sample prototypes and then report how they felt. I was eager to write about these scenes, but formal testing didn’t begin while Dooma was at the company. Dooma raised about $10M for Ebbu, but it never released the Feelings.

Despite its indisputable value and interest to researchers, cannabis had been shut out of mainstream science since World War II. In 2014, Ebbu was one of the few cannabis companies with both the nerve to break federal law and the wherewithal to hire Ph.D. scientists. Even if Ebbu didn’t perfect all five Feelings, an investor might have speculated, the scientists were bound to come up with something sellable. In any case, that’s what happened.

After Cooper fired Dooma in early 2016, the company shifted its focus from product development to basic research. In October 2018, Ebbu announced a deal to sell its assets, notably a portfolio of patent applications, to Canopy Growth, one of Canada’s largest pot companies, in a cash and (mostly) stock deal worth US$250M. It’s not clear how or if Ebbu’s assets have contributed at Canopy — its stock is down about 65% since October 2018 — but Ebbu’s investors did well.

As I’ve previously reported, in January 2014, about six months after founding Ebbu, Dooma emailed his co-founder Cooper, suggesting he “pick up a nice CO2 oil and remove it from its container and put it in a tupperware or something and just tell everyone it’s our prototype.” (Cooper has declined to comment.)

The next year, Fusion taped a segment where Dooma gave three people vape pens so they could guess which Feeling they’d tried. Two of the three guessed accurately.

It’s not clear what the test subjects inhaled. Months later, after a meeting with a prospective investor, an Ebbu scientist wrote to Dooma indicating the Feelings were not yet ready for testing: “You were acting like we had prototypes for Feelings at this moment…I emailed you previously to ask you please not to say this and I was disappointed that you never replied.” (In 2016, a spokesman for Dooma told me the company had prototypes for the Feelings in the second quarter of 2015.)

“The consensus,” according to a former Province executive, is Dooma has “a deep desire to be seen as a visionary.” A few weeks after Cooper fired him, Dooma told me he was starting a new cannabis company, to pursue a more exciting market opportunity.

Province Brands intended to sell a very different product than the Feelings. But both companies aimed to address what Dooma considered weed’s inherent shortcomings: that it’s too stigmatized, and the high too long-lasting and unpredictable to compete with alcohol. To do so, he said, the drug had to be remade into something completely new.

In general, cannabis CEOs think of themselves as building an industry capable of competing with alcohol. At Province, Dooma added a unique twist: He wanted to make cannabis more like alcohol.

In presentations, he said Province was developing an “evolved cannabis” technology that would use marijuana to produce a buzz more like booze than weed. It would offer drinkers, “That fun social, unique, high energy feeling that people love so much from alcohol but to get it without the alcohol and without the hangover,” and booze’s other drawbacks, he said.

Cannabis edibles can take up to two hours to kick in, and then last for hours. Province’s THC-powered beverages, he said, aimed to generate a “dose-response curve” more like the alcohol’s faster onset and come down.

“Alcohol is poison!,” Dooma told Vice. Instead, Province sought “to create a safer and healthier alternative… a low calorie product that is gluten-free but can compete in terms of its appeal to an alcoholic beverage.” (Based on my memory of reporting on Ebbu, Dooma was not a heavy drinker or cannabis consumer.)

While Dooma described a trillion-dollar opportunity, there isn’t much evidence of consumer demand for beer brewed from weed. That doesn’t ensure failure, of course. There was no evident consumer demand for the iPhone. But the pitch does invite questions about why this drink, among all the other cannabis products, was destined for world-historical success. As an interviewer for Toronto Life put it, “Pot flavored beer doesn’t sound terribly appetizing.

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Alex Halperin’s previous reporting on Ebbu and Michael “Dooma” Wendschuh

  1. “I’ve told people what they need to hear to get their money in…” : Ebbu and the rise and fall of a modern weed dealer

Pando, June 13, 2016

1a. What shield law? Lawyers for Ebbu co-founder Michael Wendschuh tried to subpoena Pando writer’s notes and sources

Pando, May 17, 2017

2. Dooma Goes Nuclear: A green rush story

WeedWeek, February 25, 2019

3. The Ebbu Files

WeedWeek, October 13, 2019

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Dooma Does the Impossible

If it were easy to brew beer from marijuana, someone would have done it already. When Dooma first brought the idea to experienced brewers, he says they “laughed” at him, “One guy said it was chemically impossible.” Pot plants don’t contain a starch, such as barley, which a typical brewing process breaks down into sugar and ferments.

But Dooma realized all plants are made of sugar at the molecular level. Cellulose, the primary component of plant cell walls, is a chain of glucose molecules. Dooma told investors that Province had developed a patent-pending method to “liberate” the sugar into a fermentable liquid. “The underlying observation that made this entire company possible.. is that every tree, every shrub, every blade of grass” is sugar, Dooma said. “If you’re sitting at a wooden table, that table is all made of sugar.”

In the January 2020 presentation, and another one from June 2019, Dooma shows the plant matter “melting” into a molasses soup the color of milk chocolate. “This molasses is sticky, it’s sweet, and if you just so much as touched it you would get a high from the phytocannabinoids that would go in through your skin,” he said.

“THC (and other cannabinoids) don’t penetrate skin,” says Dr. Jordan Tishler, a Boston-area physician with a cannabis-focused practice. (Both of Dooma’s presentations, each a little under a half-hour,  are available at the site MJInvest, which did not respond to questions for this story.)

Once the plant matter has been reduced to this sugary liquid—brewers call it wort—Dooma said Province could commence a conventional beer-brewing process. No one I’ve spoken to disputes that it’s possible to brew beer this way.

For most edibles companies, masking the plant’s mossy taste, detectable even from a few drops of THC oil, is a key priority. One imagines brewing a beer from marijuana plants amplifies the taste issue. In summer 2018, Dooma told the Guardian early batches of Province beer tasted like “rotten broccoli.” But, he said later attempts produced a drink that tasted “dry, savory, less sweet than a typical beer flavor.”

The following fall, Province announced a deal with Yukon Brewing, for the latter to distribute Province beer in the vast territory, starting in 2019. Yukon co-founder Bob Baxter told WeedWeek the project “derailed when difficulty cropped up in creating an extract that resulted in tasty beer.”

For years, Dooma said Province would use its process to make two distinct types of cannabis beer. The first category would be alcohol-fueled beers brewed from hemp—cannabis plants containing only trace amounts of THC— which could theoretically be sold anywhere one finds beer. (The Yukon partnership was for an alcohol beer.)

Province’s more audacious flagship product — the “alcohol killer” — was beer brewed from THC-rich marijuana, which would get drinkers high. “I think a lot about legacy, what I’m going to leave behind,” Dooma told Toronto Life. “Two hundred years from now…if people can be consuming a healthier and safer alternative to alcohol, that could have a lasting impact.” (For this product to be legal in Canada, alcohol produced in the brewing process would have to be removed.)

Dooma being photographed for Toronto Life https://www.flickr.com/photos/provincebrands/

Should Province release a THC beer, it will compete against dozens of cannabis beverages, and thousands of other cannabis brands. All of them, essentially, also think of themselves as a safer and healthier alternative to alcohol.

What is Province’s edge in this very competitive market? In presentations, Dooma points to his product’s “authenticity” and “craftsmanship.” He said the company represented the dawn of an “entirely new brewing tradition.” Its drinks could appeal to connoisseurs — like single malt scotch — but also be “sessionable.”

Dooma said the marijuana beer would be a premium product made inexpensively from the “stalks, stems and roots” discarded by Canada’s legal pot farms. This echoed a claim he made at Ebbu that the Feelings would be a top-shelf product produced from non-premium cannabis.

The beer, Dooma said, would contain only four ingredients: water, cannabis, yeast and hops, #watercannabisyeasthops on Province’s Instagram feed. Once another company sought to make its own cannabis beer, Dooma suggested it would have to use his intellectual property. Province would “own this entire category,” both THC- and alcohol-powered, he said.

To demonstrate the value of intellectual property in nontraditional beers, Dooma sometimes told investors about the Japanese brewery Kirin, which invented a way to brew beer from soybeans. Kirin’s soybean beverage, known as Nodogoshi, was invented to exploit a Japanese tax loophole that allows it to cost much less than ordinary beer. This makes Nodogoshi and its competitors popular discount options, though Kirin said it’s not available outside Japan, where there’s no tax break. According to one assessment, these drinks “vary from ‘Pretty close to the real thing,’ to ‘Yes, this is definitely weasel urine.”

As Dooma set out to reinvent both cannabis and beer, virtually all other cannabis beverage companies opted for something simpler. They would produce a drink and then add, or “infuse,” THC.

“When we think of an ‘infused beverage’ at Province, we kind of think of Tang,” Dooma said in January. “Remember Tang, from the ’80s? It’s an orange powder stuff…. What we make at Province, then, is a premium  fresh-squeezed orange juice, because, unlike their product, our product is actually made from the cannabis plant itself.”

Fine craftsmanship doesn’t necessarily translate into rampant consumer demand. To demonstrate grassroots enthusiasm for Province beers, Dooma sometimes highlighted the press coverage Province has received. “This has captured people’s imagination and attention all around the world, because this is really not an obvious way to brew a beer,” he said in January.

Not all the coverage has been admiring. In an August 2018 headline, the acerbic investing site Equity Guru called Province “a ridiculous clown car of bullshit claims.”

A slide from Dooma’s January 2020 presentation showing media outlets where Province has been featured

In January, Dooma said Province had signed “co-packing” agreements with nine other beverage companies that “do not have a marijuana license.” With these deals, Province would produce cannabis beverages to be sold under the other companies’ brands, which, Dooma said in January, “We’re very happy to do.”  

Province has received a cannabis research license, but it appears not to have the federal license necessary to manufacture commercial marijuana products. In his June 2019 presentation, Dooma said Province’s facility would be “ready in time for [cannabis drinks’] legalization”— then a few months away. Neither then, nor in his post-legalization January 2020 presentation, did he detail Province’s license holdings.

WeedWeek reached out to five Canadian microbreweries that made these deals and one responded. Muthu Sakthivel, master brewer at Bell City Brewing Company in Brantford, Ontario, said he had not tried a Province THC-powered beer and did not know when he expected it to be released.

In his January 2020 presentation, Dooma brought up a third type of Province beverage, this one containing CBD and apparently non-intoxicating. The drink, called Yandi Gold, was “getting ready to launch” in Europe with Irish distributor Barry & Fitzwilliam.

Late last year, the companies said they expected to release the product in Ireland in February 2020. I’ve found no indication that this happened. Barry & Fitzwilliam didn’t return emails requesting comment.

A slide from Dooma’s January 2020 presentation shows the marketing campaign for Yandi Gold.

Dooma also said Province’s could license its technology to make (alcohol) beer from virtually any plant, from lemongrass to a maple tree. In January, he seemed to suggest the technology could reallocate the grain supply in developing nations and help alleviate poverty.   

In the same presentation, Dooma said Province was developing a “decelerant” that would shorten the period of cannabis intoxication to something more like alcohol. In August 2018, the site Inverse asked two scientists about the decelerant, and both were skeptical. “I can’t think of a way this would at all be possible,” Gail Anderson, then a pharmacy professor at the University of Washington, said.

In a statement to the cannabis publication Civilized, Dooma stood by his claim, but declined to discuss more until the patent applications were filed. “We are not surprised that the description of what we are doing baffles people,” he wrote. “In fact, turning the seemingly impossible into reality is what we do best at Province Brands.” Province’s former brewer Rob Kevwitch, who has a Ph.D. in organic chemistry, thinks a decelerant could be possible, but told WeedWeek he wasn’t involved in the project.  

Dooma then discussed the company’s “most interesting” initiative, which he compared to Space X’s Mars mission: an “evolved” cannabis beverage that “will give you a sensation that is less like the high of marijuana…more like the pleasant sensation of drinking alcohol.” He said it would “interact with a lot of the same neurologic systems as alcohol. They’ll trigger the release of the same neurotransmitters, like GABA or norepinephrine.”

I sent Dooma’s language to two doctors with relevant expertise. The more open-minded response called it “vague” and “sensationalist.”

Like any CEO’s pitch, Dooma’s presentations raise questions for investors to explore. For instance, someone might want to better understand how the THC in the starting material—the “stalks, stems and roots”—survives the brewing process. They might also be curious how Province ensures consistent potency, which both consumers and the law demand. Dooma told The Guardian Province’s experimental brews averaged about 6.5 mg of THC per beer. (Regulators generally consider 5 or 10 mg to be the rough equivalent of one drink of alcohol.)

Dooma probably has good answers to these questions. But cannabis beverages became legal in Canada and Province didn’t release its change the world beer. Asked about it, one person who left the company in 2019 wrote, “They didn’t seem anywhere near being able to pull that off.”

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Big Gulp

For years in cannabis circles, drinks have been the next big thing. THC-laced kombucha, sodas, fruit drinks, coffees, teas, seltzers and even wines are now available in legal states. Analysts predict a multi-billion dollar market. But thus far, cannabis drinks account for only a small fraction of edibles sales.

Consumers aren’t used to drinking cannabis, and have no particular incentive to start. In recent months, however, the category seems to have gained traction. Among other reasons, last year’s vape crisis and now the pandemic put some consumers off inhaled products. In March, the upscale, low-THC “tonic” brand Cann saw sales jump 300%.

Drinkable weed surely isn’t the toughest thing to sell, but the market is bound to be punishing. Drinks can be more difficult to produce with assured consistency than gummies or cookies. And manufacturing with an unfamiliar material presents unforeseen technical challenges. Researchers discovered, for example, that metal soda cans leach THC’s potency.

Drinks are also expensive. A light buzz might appeal to some “non-traditional” cannabis users: women, affluent professionals and the elderly. But like other vice industries, cannabis depends on heavy users, and they expect a more tangible return on investment. Compared with a pack of infused gummies, a Cann-brand tonic costs roughly 12 times as much per milligram of THC.

With marijuana federally legal, Canada has emerged as the world capital of cannabis beverage innovation. Several global drinks companies, including Budweiser parent company AB InBev, have initiated drink partnerships with licensed marijuana companies.

Canopy Growth, the Ontario-based company that acquired the assets of Dooma’s first pot start-up, Ebbu, has released Tweed Houndstooth & Soda. A 12-ounce can contains a 2 mg microdose of THC and 1.5 mg of CBD; It sells for about C$4 (US$2.85.) Canopy told WeedWeek it has solved the issue of metal cans neutralizing the THC in pot drinks, but declined to say how. (U.S. liquor company Constellation Brands, parent of Corona Beer, is a major investor in Canopy.)

Under Dooma, Province planned to take on the world’s largest beverage companies by doing something more difficult than they were doing. While everyone else settled for an infused beverage — “Tang” — Province’s brewed-from-cannabis beer would be harder to capitalize on for at least three interconnected reasons.

First, Province had to invent a new product category and manufacturing process. It then had to develop an appealing product. The company promised “premium and super premium” beverages, which almost always have a desireable color and consistency.  Finally, Province would have to persuade the Canadian public to try something unfamiliar; The country has imposed a near-total ban on marijuana advertising.

In short, Canada’s market is dominated by deep-pocketed multi-nationals developing products for which there is no proven demand, in an excruciating regulatory climate. All of this suggests inhospitable terrain for an entrepreneur like Dooma, who by his own account, “didn’t know anything about how beer is made,” to start a cannabis beer company.

“I don’t know if it was ever produced.”

After Dooma’s June 2019 presentation, a man in the audience said an infused cannabis beer made by California brand Two Roots, had given him cottonmouth, a common side effect of cannabis use. “Everyone’s metabolism is different,” Dooma said, so he couldn’t guarantee Province’s beer wouldn’t do the same. But he added, “I’ve never had that experience. No one of the thousands of people who have drank our beer have said that. But you have to try it for yourself.”  

A few minutes earlier, Dooma had said, “The beer that we make from marijuana is not alcoholic and it intoxicates using marijuana or its phytocannabinoids. Now we can’t sell this in Canada until later this year. So in the interim, we’ve been having great parties, where we just invite everyone over and we give out our beer…for free.”

At these parties, Dooma said, “Everyone is there until 12, one in the morning. People are drinking, they’re having a great time and no one is drinking alcohol. That is the future that we are creating at Province Brands.”

At the time, Province had been working with its “master brewer” Rob Kevwitch for more than two years. Kevwitch had previously co-founded Grist, a Colorado microbrewery known for boundary-pushing recipes.

In late 2018, for a previous story, Dooma let me speak with Kevwitch as well as a senior Province executive and an investor. Based on those conversations, the story gave Province the benefit of the doubt that it could produce its cannabis beer. (The executive didn’t return a request for comment for this story. The investor couldn’t be reached.)  

Kevwitch stopped working with Province in August 2019. During his time with the company, he told WeedWeek, he only worked on alcohol beers brewed from hemp. “There were several batches,” he wrote. “Overall it tasted really good.”

Regarding the THC beer, he wrote in March, “I don’t know if it was ever produced. If it was, I didn’t work with it so I don’t know the exact timing of that product.” In addition to Kevwitch, five more people who have been professionally involved with Province, at least two of them in 2020, said they were not aware whether the company ever successfully brewed a THC beer from marijuana. 

In 2015, when reporting on Dooma’s first cannabis company, Ebbu, I struggled to determine whether the company was making progress on its Feelings product line. Tracking Province’s product development has been a similar challenge.

In a July 2017 interview with the podcast CannaInsider, Dooma appeared to indicate two Province drinks were deep into product development: “We clock in at about 60 calories for one of our beers, 80 calories for another.” (It’s not clear whether he’s referring to alcohol or THC beers.)  

In the same 2017 interview, Dooma said Province was “pretty close” to beginning the approval process for an alcohol beer. For the THC products, Dooma said the company would build its brewery and wait for legalization. He also suggested Province could manufacture THC beer and ship it to Europe, before Canada legalized it.

“I’ve tried their products twice, and I really like it,” an investor told Vice several months later, referring to an unspecified Province beverage. “It tastes like beer, it has the right carbonation, and it’s just really pleasant to drink.” (The investor didn’t return a request for comment.)

The following May, Ontario’s government awarded Province a C$300,000 grant to develop its THC beer. That month, a reporter wrote, the beer “doesn’t even exist yet.” 

For the research, Province partnered with Loyalist College in Belleville Ontario. Kevwitch, the brewer, wrote that the partnership “may have completed a beverage with THC.” He said he hadn’t been directly involved, and didn’t know more details.

A spokesperson for the college said it had completed a one-year project with Province and characterized it as a “preliminary study…to look at the application/feasibility of specialized processes required to support an aspect of commercial product development.” She declined to answer additional questions, citing a non-disclosure agreement.

Two months after the Loyalist partnership began, Dooma described the beer to The Guardian in the present tense. “The beer hits you very quickly, which is not common for a marijuana edible.”

It’s possible the company mastered the brewed from cannabis beer without Kevwitch and others knowing about it. But could Province have been serving something else at those parties?

Four sources familiar with the company said that at tasting events Province had served an infused THC beverage. Dooma is the only cannabis entrepreneur I’m aware of who has suggested a drink made from cannabis is inherently superior to their infused counterparts. A portion of consumers would probably prefer an infused barley beer to a non-infused one brewed from the plant. In 2018, Province even announced a partnership to develop an infused beer. (The partner did not respond to a request for comment.)

But to investors, Dooma differentiated Province from its competitors largely in that Province’s flagship beverage wasn’t infused. In January, Dooma waxed lyrical about making beverages from the plant itself. “That craftsmanship, that provenance, that sort of authenticity, it gives our beverages a reason to speak. It’s really important. All of their beverages are made from something else, typically barley, if it’s a beer, and then infused with the marijuana oil, so we stand out in that regard.”

One former Province executive, who couldn’t confirm this happening, suggested Dooma, “May have used cannabis oil that is legal in Ontario and infused to an in-house or commercial dealcoholized beer to replicate the ‘experience’ [of a THC beer] but it wouldn’t have been carry over from the plant because they were not licensed to handle marijuana.”

Cannabis-infused beverages were not legal in Canada in June 2019, when Dooma described the parties. If these parties were in Canada, it’s not clear whether Province had the licenses necessary to serve cannabis drinks, or if such licenses even existed.

Trina Fraser, leader of the cannabis practice at Ottawa law firm Brazeau Seller, writes that while there may be exceptions for research, Canadian law makes it an offense to distribute cannabis without the necessary license. According to Canada’s 2018 Cannabis Act, “Distribute’ includes administering, giving, transferring, transporting, sending, delivering, providing or otherwise making available in any manner.” (Fraser’s comments are general, not in reference to Province.)

Dooma understood the law as an impediment. In a July 2018 interview with the CBC, he said the company could make small batches of marijuana beer, “but no one is allowed to drink it.” Province had been careful to operate legally, he said. That meant doing taste-testing outside of Canada and, when back at home, working with hemp instead of marijuana.

Working in Canada is “more or less impossible,” Dooma said. Even so, Province continued to pursue its flagship cannabis beer for almost two more years.

On March 9, 2020 Province posted a glass of beer to its Instagram feed. Like many previous posts, it could suggest Province’s cannabis beer was in advanced product-development —“More flavor trials, taking careful notes and brainstorming… #brewedfromcannabis… #highbeer”—without saying when it would be available.

 

Instagram @provincebrands

Then in April, Province announced it had raised $1.6M (C$2.2M) to pivot to a new business: Instead of brewing beer from weed, it would market its technology to produce alcohol beer from any plant. Dooma described it as a remedy for grain shortages caused by climate change. “This could be transformative for beer companies where the price of barley has gone through the roof,” he told TechCrunch. (The price of barley might be the most stable thing in the world right now.)

According to the story, Province still planned to produce an alcoholic beer brewed from hemp, but it wasn’t clear if the THC beer Dooma had been pitching for years as a trillion dollar opportunity, had a future. Instead he touted the company’s new direction. “Closing this round quickly highlights the attractiveness of Province Brands’ technology, IP, and market opportunities,” he said.

The pivot, Dooma said, owed to the capital intensive nature of the marijuana business. “The cannabis industry was overvalued from an equities perspective for years,” he said. “Starting in mid-2019, we started to see that crash…. We didn’t want investors to take a bath on it if that could be avoided.”

“If you’re willing to pay the fee, you get stage time”

For the seven years since Dooma co-founded Ebbu, he has been a fixture on the cannabis fundraising circuit: a blur of offices, conference halls, hotel ballrooms and private mansions, which the COVID-19 pandemic has now forced online. 

Similar investing microconferences exist in many mainstream industries and have a reputation for Boiler Room wolfishness. But in the quasi-legal cannabis business, they have a more central role; without access to the U.S. financial system, entrepreneurs have few other places to meet investors.

Dooma has also fundraised outside the cannabis world in Budapest and Antwerp. A former Province executive said an “enormous amount of money” went into events where “Dooma can do his dog-and-pony show.” 

 

Instagram @provincebrands

Cannabis investing conferences operate largely by charging both presenting companies and the investors who come to hear them.   “If you’re willing to pay the fee, you get stage time, and that is the case with every micro-conference,” said a former executive at a conference where Dooma has pitched more than once. “Organizers have very little qualification process other than paying the fee,” which typically ranges between $5,000 and $15,000.

Among these conferences, Arcview Group is probably the largest and most prominent. Founded in 2010 and featured in a 2013 Fortune cover story, Arcview says its paying investor “members” have invested more than $270M in 200+ start-ups.

The numbers, which imply a lot of small early-stage deals, don’t do justice to Arcview’s influence as a hub of deals and networking over the cannabis industry’s tumultuous first decade. Many prominent companies have raised money through Arcview, or through people they met at Arcview. Other companies which raised money at Arcview, such as Ebbu, have sold for very healthy returns.

I first heard about Ebbu in mid-2014 from Arcview co-founder and then CEO Troy Dayton. Dooma has appeared at their events numerous times since. After Cooper fired him, Dooma returned to Arcview events to pitch Province Brands. 

In 2018, I asked Dayton why Arcview gave Dooma a platform following a story I’d written about Ebbu. The company’s co-founder and former CEO Jon Cooper had cited the piece in a court filing, saying it described behavior indicating “that [Dooma] engaged in serious misconduct while at Ebbu.”

Dayton responded that the investor-comprised selection committee was aware of the situation. He said Arcview posted about it on Province’s profile on the company’s deal platform, accessible to paying members. (He declined to share the posted language.)

“Arcview’s job is to get relevant deals in front of our members,” Dayton wrote. “It was my team’s decision that it was a relevant enough deal to give members a chance to consider it.” At one event, Province paid Arcview a $2,500 fee and the company later sponsored other Arcview events, Dayton wrote. Sponsorships cost between $6,000 and $15,000 each.

Since that 2018 exchange, Arcview appears to have welcomed Dooma back at least four more times. Dayton, who is now chief strategy officer, and Arcview declined to comment further.

Matt Hawkins, a managing partner at cannabis investment firm Entourage Effect Capital, which took a controlling position in ArcView last year, said the company’s conferences no longer operate on a pay-to-play basis. “We want it to be a true platform for early stage companies to present their opportunities without having an overhead cost to do so.” Hawkins didn’t comment on Dooma or respond to a question about how ArcView would make money.

Before the pandemic lockdowns and his company’s pivot, Dooma seemed to still be fundraising. In February, about two weeks after his MJInvest presentation, Province sponsored at a Kahner Global conference in Ft. Lauderdale where Dooma appeared alongside some of the most prominent executives in the industry.

Kahner Global founder Noa Kahner, whose LinkedIn page lists her as an advisor to Province Brands, declined to comment. “Please stop contacting me,” she wrote. “This is getting old.”

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Alex Halperin
Editor/Publisher