Calgary banker picks buds over barrels
After 25 years in oil, Sonny Mottahed moved into the marijuana field
In the boardroom at his former merchant bank office in Calgary, Sonny Mottahed is taking down a black-and-white photo of the wooden derricks over Spindletop, the historic crude find that started the Texas oil boom.
In its place, he’s hanging a photo of the “HOLLYWOOD” sign vandalized to read “HOLLYWEED,” a playful riff on the Los Angeles landmark that he hopes heralds the start of a new boom in Canada: legal marijuana.
After 25 years in the oilpatch, most recently running his own advisory firm, Mottahed is striking out into the pot business. He’s intrigued by the potential of the nascent industry as Canada prepares to legalize recreational marijuana this year, while dismayed at the challenges facing the oilpatch.
“The market wasn’t doing any transactions,” Mottahed said. “So I needed to look at doing some things differently.”
Mottahed, 45, had his life shaped by the oil and gas business.
He followed in the footsteps of his dad, an Iranian-born executive at Exxon Mobil Corp., launching a career that took him to more than 30 countries. Around 2004, he tried his hand as an investment banker, first at companies including Raymond James, then at his own firm, Black Spruce Merchant Capital.
After three years of deal making, plunging oil prices had cooled the mergers market, and Mottahed was looking for new opportunities.
Around that time, he met Jason Kujath, a tax lawyer who was planning to leave the legal field.
The two had met with cannabis companies in the course of their work and found the management teams ill-equipped to raise the capital needed to start serious companies or manage them.
Mottahed, who knew little about the marijuana business at the time, toured U.S. states where pot is already legal — Washington, Oregon, Colorado — and met with industry players to collect advice and information. The trip convinced them the opportunity was real.
“The light-bulb moment for me was when I realized that this industry will be the next industry that is created — actually and truly created — in my adult lifetime,” Mottahed said.
His former oil-industry colleagues first greeted the news with raised eyebrows, but as the buzz around the new industry has grown, many have come to see his vision. Some have even invested.
Mottahed’s company — 51st Parallel — raised a total of $22.5 million (Canadian), which includes $1.5 million from himself, Kujath and another business partner. The rest came from oil industry contacts and other Calgary business people, he said.
51st Parallel purchased five acres of land in Lethbridge, Alta., where the company plans to build a 60,000-square-foot greenhouse and 25,000 square feet of processing and office space. The company is applying for eight retail locations — under the brand Pineapple — throughout Alberta.