Cannabis Deal Tracker: Investment and M&A Activity in the Cannabis Industry May 4th - May 8th, 2020

May 14, 2020 (Investorideas.com Newswire) CAPITAL RAISES: Week 19 was another strong week for capital raises with 11 transactions raising a total of $199.2 million, although this was down vs. a very strong week 19 in 2019, which saw 25 transactions totaling $486.7 million.

Since bottoming out in mid-April at the height of the COVID-19 pandemic, we are seeing a clear uptick in investment activity in the industry.

The increase in aggregate capital raised was primarily due to Constellation Brands (NYSE: STZ and STZ.B) decision to exercise nearly 18.9M warrants to buy Canopy Growth Corp. common shares (TSX: WEED, NYSE: CGC). On issuance, those shares made up about 5.1% of outstanding shares of Canopy Growth and were issued in November 2017 to Constellation indirect subsidiary Greenstar Canada. They were exercised at C$12.9873 per common share, an aggregate of about C$245M. With the new shares, Constellation Brands boosts its ownership to 38.6%. And assuming full exercise of all remaining warrants and full conversion of notes, Constellation would own about 55.8%.

Of the 11 capital raises, 9 (or 82%) were closed by public companies. So far in 2020, public companies have accounted for 77% of all capital raises, vs. 66% for the same period in 2019. In 2020, public companies have accounted for 88% of total dollars raised, vs. 72% 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 9 public company capital raises, all are Canadian exchange listed.

Equity-based capital raises accounted for 6 of the 11 transactions, with debt-based financing accounting for the other 5 deals. This is now the third week in a row that 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 5 debt-based transactions, 2 were convertible note structures (which remain the dominant form of debt financing in the cannabis industry), with the other 3 transactions being non-convertible structures.

We continue to see good diversity among the industry sectors that attracted capital as investors seem to be "spreading their bets" more that we've seen in prior years. The leading sector was Cultivation & Retail (5 transactions), followed by Hemp (2 transactions), Investments/M&A (1 transaction), Biotech/Pharma (1 transaction), Infused Products & Extracts (1 transaction), and Consulting Services (1 transaction).

MERGERS & ACQUISITIONS

We recorded 3 M&A transactions during Week 19 of 2020, vs. 7 in the prior year period.

All 3 acquisitions were made by public companies which remain the predominant acquirers in the industry.

Sire Bioscience Inc. (CSE:SIRE)(CNSX:SIRE.CN)(OTC:BLLXF) (FSE:BR1B) announced that, in a strategic move to enter the USD$50 billion sports nutrition space, entered into a definitive agreement to acquire 100% of the issued and outstanding common shares of Fusion Nutrition Incorporated, in exchange for $145,682 worth of common shares of the Company at a value of $0.05 per common share subject to any approvals required by the Canadian Securities Exchange.

SLANG Worldwide Inc. (CNSX: SLNG), (Frankfurt: 84S), announced that it has entered into an acquisition agreement dated March 2, 2020 to acquire Cultivate Brands Corp. Cultivate is a privately-owned company with a portfolio of brands and other intellectual property which are complementary to SLANG's portfolio.The Acquisition is structured as an all-stock transaction in which SLANG will issue a non-material amount of common shares in exchange for all the issued and outstanding shares of Cultivate. The majority of the SLANG Shares issued pursuant to the acquisition will be subject to a lock-up period with rolling expiration dates.

Global Health Clinics Ltd. (CSE: MJX) has closed and acquired all of the issued and outstanding shares of Anytime Health Corp. (AHC), a private British Columbia corporation, for consideration of 30 million Global Health shares at a deemed price of $0.05 per share to AHC shareholders. Global Health will use Anytime Health as a developmental stage web based application to assist with medical records and scheduling of daily appointments for medical clinics and medical offices.

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.

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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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