Cannabis Deal Tracker: Investment and M&Amp;A Activity in the Cannabis Industry April 20th - April 24th, 2020
April 29, 2020 (Investorideas.com Newswire) CAPITAL RAISES: Capital raise activity recorded its second consecutive positive week, with 6 transactions raising a total of $61.9 million, albeit down significantly vs. the same period in 2019, when we recorded 18 transactions totaling $850.7 million.
Of the 6 capital raises, 5 (or 83%) were closed by public companies. So far in 2020, public companies have accounted for 78% of all capital raises, vs. 67% for the same period in 2019. This is indicative that investors are choosing to invest in the cannabis sector through pubcos that offer greater liquidity. Also driving this increase is the recovery in cannabis stocks in general coming off of the lows reached after the initial impact of COVID-19.
Of the 5 public company capital raises, all are Canadian exchange listed.
Equity-based capital raises accounted for 3 of the 6 transactions, with debt-based financing accounting for the other 3 deals. For the second week in a row we've seen an uptick in equity-based capital raises, reversing a nine-month trend where debt financings increasingly dominated the capital raising landscape. Once again, this is likely indicative of the fact that a number of public cannabis stocks bounced off of their lows after the initial impact on stock prices from COVD-19, leading more public companies to accept equity deals that became less dilutive.
Of the 3 debt-based transactions, 2 were convertible note structures which remain the dominant form of debt financing in the cannabis industry.
The Cultivation & Retail sector accounted for 5 of the 6 transactions, regaining its dominance as the primary sector attracting investment capital.
MERGERS & ACQUISITIONS
We recorded 1 M&A transaction during this period, vs. 2 in the prior year period.
CB2 Insights (CSE: CBII), a provider of predictive analytics tools, data-driven software and comprehensive services across the cannabis value chain, acquired the assets of Colorado-based medical cannabis clinic group Rae of Sunshine Health. This is the third medical cannabis clinics acquisition that CB2 has announced.
The Viridian Cannabis Deal Tracker is a proprietary information service that monitors capital raise and M&A activity in the legal cannabis and hemp industry. Each week the Tracker aggregates and analyzed all closed deals and segments each according to key metrics:
- Industry Sector (one of 12 sectors, from Cultivation to Brands)
- Dollar value of the transaction
- Region in which the deal occurred (country or U.S. state)
- Status of the company announcing the transaction (Public vs. Private)
- Deal structure (equity vs. debt)
- Key deal terms
The Viridian Cannabis Deal Tracker provides the market intelligence that cannabis companies, investors, and acquirers utilize to make informed decisions regarding capital allocation and M&A strategy.
Since its inception in 2015, the Viridian Cannabis Deal Tracker has tracked and analyzed more than 2,500 capital raises and 1,000 M&A transactions totaling over $45 billion in aggregate value.
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About Viridian Capital Advisors, LLC
Viridian Capital Advisors (www.viridianca.com) is a financial and strategic advisory firm dedicated to the cannabis market. We are a data- and market intelligence-driven firm that provides investment, M&A, corporate development, and investor relations services to emerging growth companies and qualified investors in the cannabis sector. Our banking practice, through broker-dealer Bradley Woods & Co. Ltd. (Member FINRA/SIPC), provides capital and M&A services to fund the growth of our clients, while our advisory practice helps to position and build their businesses. Our team's decades of high level operating and transactional experience on Wall Street in a variety of emerging sectors, allows Viridian to provide comprehensive strategic and financial solutions that assist cannabis enterprises in realizing their full potential.
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