Woodstock 50 Enlists New Firm to Seek Investors, While Branded Cannabis Plan Is Tied Up in Court
With the event's future in limbo, co-founder Michael Lang has brought on Oppenheimer & Co to serve as a financial advisor while trying to launch a Woodstock 50 line of marijuana with MedMen.
Looking to invest in Woodstock 50? The festival needs $20 to $30 million to get tickets on sale and get its permit squared away, according to sources. Today, officials with the semicentennial fest announced they had enlisted new financial fire power to raise the money needed to produce the three-day event in August. and overcome a number of obstacles in the way.
After losing the support of its main investor Dentsu on April 29, Woodstock 50 announced Friday (May 17) it has enlisted investment bank and financial services firm Oppenheimer & Co. to serve as a financial advisor and "complete the financing for the festival." It's unclear what that means exactly -- a press release quotes John Tonelli, head of debt capital markets and syndication at Oppenheimer in New York, saying, “We are thrilled to be onboard for this incredible weekend of music and social engagement.”
Tonelli's division provides "a full range of wealth management, securities brokerage and investment banking services to high-net-worth individuals" and "businesses" according to a 2015 announcement from Oppenheimer. The press release sent out this morning doesn't say whether Tonelli or Oppenheimer are providing financing and capital for the 50th anniversary festival or simply helping it raise money.
On Wednesday, a judge ruled Dentsu did not have to return $18 million it withdrew from Woodstock 50's bank account, leaving the festival without funding. But co-founder Michael Lang has been attempting to raise new money since early May to "allow the festival to proceed with a new investor without any legal complications," according to a letter obtained by Billboard.
The May 4 letter sent by Woodstock 50 to potential investors claims the festival has the potential to profit $30 million now that Dentsu has officially pulled out of the festival.
Since the the judge on Wednesday also ruled Woodstock 50 could move ahead -- despite Dentsu's attempt to outright cancel the event altogether -- Lang now says the festival is back on.
Billboard has learned that besides ticket sales and sponsorships, Lang had another plan to earn income from the Aug. 16-18 event at Watkins Glen International: the Woodstock co-founder also planned to launch a legal cannabis Woodstock brand with high-end dispensary operators Med Men. But a judge has since temporarily blocked Woodstock Ventures (which owns the Woodstock trademark) from completing its licensing agreement because of a trademark dispute that has it bogged down in federal court with a company called Woodstock Roots that also planned to launch its own cannabis brand, a move Lang tried to stop by filing a federal trademark infringement lawsuit in February 2018.
The move might have backfired. Woodstock Roots counter-sued and federal judge Colleen McMahon agreed to issue a temporary restraining order so that neither company could move forward with the cannabis strain until the case was figured out in court and the court decided if cannabis, which is still illegal at the federal level, can even be trademarked.
Lang's attorney's have since asked McMahon to hurry up and make a decision on the trademark because Lang and Woodstock are running out of time to promote their cannabis brand.
Lang and Woodstock Vemtures are "are deeply within the marketing window for their upcoming 50th Anniversary Music Festival this summer, a once in-a-lifetime event providing irreplaceable event-driven benefits to Plaintiffs' Woodstock branded-products, including cannabis, through 'tens of millions of dollars of free publicity' and massive media coverage generating billions of social media impressions," Lang's attorney Shawn Regan wrote in a March 25 letter. "Moreover, these events are occurring within a window of burgeoning commercial opportunity in the legal cannabis industry, already a $10 billion market and expected to triple in short order ... where licensors forced to remain on the sidelines, as Plaintiffs are currently, will later face a barrier to entry not suffered by those immediately able to move into the market."
As for the festival, Lang told potential investors in a May 4 letter, "At this point, all of the project plans are in place and the mass gathering permit is ready to issue. Essentially, this is now a turn key situation with the project mostly de-risked. The venue and talent are locked in and paid for, and the plans are complete."
The letter was sent before announcing that Oppenheimer had been brought in to help raise money for the festival.
"Woodstock 50 is projecting that the Festival would have a capacity of approximately 75,000 people with base ticket prices of $399, commensurate with pricing for other festivals," the May 4 letter reads. "Woodstock 50 projects that the festival will have total revenues of approximately $77 million. Woodstock 50 projects that the festival will have remaining fixed costs of approximately $35 million and variable expenses of approximately $12 million, leaving net profit of approximately $30 million."
Lang's letter closes, "Woodstock 50 will undoubtedly be one of 2019’s biggest music festivals. Woodstock is one of the most well- known and iconic brands in all of music, having arguably started the music festival movement."
Officials from Woodstock 50 have still not secured the permits needed from the New York State Department of Health to stage the event and tickets are not yet for sale. The festival's original producers, Superfly, have dropped out of Woodstock 50 and Lang says CID Entertainment will take their place.
"Given Dentsu’s decision to withdraw from the Festival, all parties have determined that it is prudent to transition to CID as the lead producer to have a clean slate and more nimble production," the May 4 letter reads. "CID has previously been working on the Festival to oversee the camping & VIP services. CID is thus very familiar with the Festival and is thus completely prepared to transition into the role of producer."
Billboard reached out to Woodstock 50, Oppenheimer & Co and CID Entertainment for comment, but did not receive a response at time of publishing.
This story has been updated to correctly identify the plaintiff as Woodstock Ventures in the cannabis trademark dispute with Woodstock Roots.