The parent company of Willie’s Reserve, country star Willie Nelson’s cannabis brand, announced today that it has raised $12 million in a convertible note deal led by Tuatara Capital. The funding will help the brand expand into other states and brings the company’s total funding to $29.5 million.
GCH Inc. is planning to expand Willie’s Reserve into California by spring of this year. The brand is currently sold in Colorado, Washington, Nevada and Oregon. GCH is also in the midst of raising a $40 million Series B round.
“We’re on the right side of history,” said Nelson in a statement announcing the news. “People have spoken with their votes and their dollars. Now that we’ve proven regulating and taxing is good for individuals and business and states, it’s pretty clear that pot is good for America.”
For cannabis companies in the U.S., expanding to other states presents unique challenges. Each state has its own rules and regulations, making it difficult to build a national brand. Many in the industry liken multi-state expansion to an American company expanding internationally.
But celebrity branding has emerged as one way to create a marijuana company with national clout. Fellow country musicians Melissa Etheridge and Band of Heathens have entered the cannabis space with marijuana-infused wine and cannabis strains, respectively.
Hip-hop artists Snoop Dogg, Ghostface Killah and Wiz Khalifa all have their own cannabis brands or products. Meanwhile, TV personalities Whoopi Goldberg and Montel Williams have also made forays into the industry with their brands Whoopi & Maya and Lenitiv Labs.
When it comes to multi-state expansion, cannabis companies usually have to partner with existing businesses that hold state licenses. Willie’s Reserve has adopted a hybrid model: The company has distribution partners in Nevada and Oregon, but has its own distribution entities in Washington and Colorado. GCH plans to continue this approach as it continues expanding into new markets.
The company is careful about where it sources its cannabis from, hoping to support the smaller farmers that Nelson has relied on prior to legalization. Meanwhile, he seems intent on leaving the details to the pros: “Why should I grow if this guy over here, or that guy, already has it?” he told New York magazine ahead of launching Willie’s Reserve in 2015. “I haven’t become all that expert on that… The way I look at it is: I’m either high or I’m not.”