Baker Technologies Inc., a Denver-based developer of software for cannabis businesses, has drafted a seemingly simple recipe for success: strength in numbers.
The startup that started out with desires of being a consolidator — acquiring and integrating other cannabis-centric technology firms — will itself be folded into a larger firm.
Under a four-company merger announced Tuesday, Baker will serve as a key ingredient of Tilt Holdings Inc., a newly formed provider of an assortment of cannabis services, technologies and products to feed the mushrooming multibillion-dollar global cannabis industry. The four-way merger is another deal in a wave of cannabis industry consolidation and comes on the heels of Monday’s giant $2.2 billion merger of Canadian marijuana firms Aurora Cannabis Inc. and MedReleaf Corp.
In addition to Baker, Tilt’s founding companies include: Briteside Holdings LLC, a Bend, Ore.-based marijuana delivery company; Sea Hunter, a Boston-based marijuana facilities operator and finance provider; and Sante Veritas Holdings Inc., a newly formed Toronto-based company that submitted applications to be a licensed marijuana producer in Canada.
Tilt is targeting a public offering in Canada and projecting a market capitalization of $500 million. By the end of this year, Tilt could post $70 million in revenue. That could grow to upward of $200 million by 2019, officials said.
“Right now, there’s a massive opportunity — where the Canadian public markets have really high multiples of revenue (for cannabis firms),” said Joel Milton, Baker’s co-founder and CEO.
But structure is lacking, he said.
Beyond this idea of growing more weed and selling more weed, the four companies combined under Tilt seek to fill in the gaps in the early-stage market.
“We’re providing the technology and infrastructure that this industry needs,” he said.
Baker sought to do just that since its founding in 2014, providing “Salesforce”-like customer relationship management software