Dan Bilzerian’s Cannabis Company Lost $50 Million Last Year
According to Forbes, the annual report filed for Ignite International Brands, Ltd., of which Dan Bilzerian is the founder and CEO, revealed that the company “posted $67 million in losses in 2019.” ($67 million in Canadian dollars is approximately $50 million US).
Bilzerian’s company “issued and sold shares of its company stock, and the company also raised money via debt,” Forbes reported. “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.’”
With all the money that Bilzerian’s company had, Ignite went on a “spending spree, even as its stock tanked,” the report continued. “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,” Forbes wrote. “Ignite hosted lavish parties, threw events, and did all kinds of stuff a company flush with cash does.”
The report stated that in 2019, Ignite lost $43 million on operational costs alone, mostly marketing and promotion, leases on offices, and compensation for staff and executives. Ignite’s budget that year for “marketing and promotion” was $22.26 million, which was 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),” Forbes reported.
“Complicating all of this is the unavoidable fact that Dan Bilzerian receives at least some of his fortune from his father, Paul Bilzerian, a felon and Wall Street fraudster whom the Securities and Exchange Commission says owes them (that is: owes you, the American taxpayer) $62 million,” the report continued.
“The Company will need to raise capital in order to fund its operations and continue its existing and prospective expansion into strategic markets. This need may be adversely impacted by uncertain capital market conditions, including those created by the COVID—19 pandemic, an inability to secure strategic partnerships in key markets, and an unfavorable perception of the IGNITE brand,” wrote the company’s Board of Directors, before warning investors that the company might implode. “The uncertainty of the Company’s ability to achieve profitable operations and its success in raising additional capital funding may cast significant doubt on the Company’s ability to continue as a going concern.”