TILT Holdings Targets 'Every Stage Of The Cannabis Supply Chain' With M&A Strategy

Alex Oleinic , Benzinga Staff Writer

TILT Holdings Inc, which has amassed businesses primarily focused on providing B2B solutions, is an example of a cannabis company with operations in both Canada and the U.S. 

The Jupiter Research Acquisition

TILT announced a new addition to its “family” of businesses Thursday. The company said it agreed to acquire Jupiter Research for $210 million, including $70 million in cash and the rest in stock — approximately 56.12 million shares. 

Jupiter is engaged in developing inhalation and vaporization technology. In 2018, Jupiter had $105 million in orders and EBITDA margins of 20 percent, TILT said in the press release. The company said it realized $77 million in revenue.

TILT expects the acquisition to expand its B2B hardware offering. Jupiter provides power supplies and cartridges for cannabis oil that feature ceramic CCELL technology. The company is working with more than 700 brands and cannabis retailers in the U.S., Canada, Israel and Europe.

How Jupiter Fits With TILT

The cannabis industry is undergoing a wave of consolidation, with more than 300 M&A deals signed last year for a total value of $13.8 billion, according to Viridian Capital Advisors data. 

TILT was formed from the merger of four cannabis companies: Baker, Briteside, Sea Hunter and Santé Veritas. The companies merged at the end of November just before TILT went public on a Canadian exchange.

Given that it was formed as a combination of four companies engaged in different segments of the cannabis industry, TILT has become a large cannabis platform.

Benzinga spoke with TILT CEO Alex Coleman, who said the company's business structure is still being designed. 

“TILT will be primarily focused on our B2B offering across the supply chain for cannabis businesses. With our technology foundation, providing software, services and a broad range of highly engineered consumer products, we enable store operators to meet consumer preferences regardless of how they evolve," he said. 

Companies Under TILT's Umbrella  

Baker Technologies is one of the top cannabis software companies and works with over 1,000 dispensaries across 24 states and Canada. Baker’s solutions cover a variety of needs, from online ordering to analytics.

Briteside builds cultivation and production facilities using prefabricated modular construction technology.

Sea Hunter Therapeutics is a vertically integrated consumer packaged goods manufacturer which also provides capital support, intellectual property and expertise to other licensed cannabis businesses.

Santé Veritas is a Canadian cannabis cultivator that provides wholesale services.

Before Jupiter, TILT acquired Standard Farms and Blackbird. Both acquisitions were announced Dec. 6, the same day the company started trading on the Canadian Securities Exchange.

Blackbird provides logistics operations and software solutions covering the entire cannabis supply chain. Standard Farms is a medical cannabis producer focused on greenhouse cultivation and CO2 extraction processing that supplies cannabis products to dispensaries in Pennsylvania.

TILT paid $50 million for Blackbird and $40 million for Standard Farms in cash-and-stock deals. 

“Being a unique and diversified cannabis company allows us to deliver comprehensive solutions across the industry, from operations and cutting-edge genetics to technology infrastructure and business services," Coleman said. "Instead of just focusing on a single segment, TILT provides technology, expertise and services at every stage of the cannabis supply chain." 

Sean Doyle