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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.

VIEW DEAL TRACKERS

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.

*Copyright © 2020 by Viridian Capital Advisors

All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. For permission requests, write to the publisher. No part of this material may be (I) copied, photocopied, or duplicated in any form, by any means, or (II) redistributed without Viridian's prior written consent.

*Disclaimers

The information contained herein is for informational purposes and is not intended as a research report. It should not be construed as Viridian recommending investment in cannabis companies or as a solicitation to buy or sell any security or engage in a particular investment strategy. Investment in cannabis companies entails substantial risk. Before acting on any information, you should consider whether it is suitable for your particular circumstances and consult all available material, and, if necessary, seek professional advice.

Viridian Capital Advisors and its affiliates, as well as their respective partners, directors, shareholders, and employees, may have a position in the securities mentioned herein or may make purchases and/or sales from time to time. Viridian Capital Advisors, through broker-dealer services provided by Bradley Woods & Co. Ltd., (Member FINRA/SIPC), may act, or may have acted in the past, as a financial advisor to certain companies mentioned herein and may receive, or may have received, a remuneration for their services from those companies.

The above information whether in part or in its entirety neither constitutes an offer nor makes any recommendation to buy or sell any securities.

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.

Marijuana remains illegal under federal law. The federal government does not recognize marijuana to have any medicinal value. Marijuana cultivation, possession, consumption, sales, and distribution are illegal under federal laws and also certain state laws. Investors in cannabis may be subject to law enforcement actions. Please note that there are differences in marijuana laws from one state, county, or city to another. Furthermore there are substantial risks associated with investing in cannabis companies, including, without limitation, changes in applicable laws, rules, and regulations, risks associated with the economic environment, the financing markets, and risks associated with a company's ability to execute on its business plan.

Contact Us:

Viridian Capital Advisors, LLC
contact@viridianca.com

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