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Cannabis Deal Tracker: Investment and M&A Activity in the Cannabis Industry November 2nd - November 6th, 2020


November 11, 2020 ( Newswire) KEY INSIGHTS & TAKEAWAYS


  • Transactional Activity: Week 45 ended November 6, 2020, saw a $28.2 million lower dollar volume and 2 fewer transactions vs. the prior week of this year and a 90.5% lower dollar volume with the same number of transactions vs the prior-year period. We tracked 3 capital raise transactions totaling $28.0 million, vs 3 transactions totaling $295.6 million during the same week in 2019. The average tranche size was $7.3 million this week, vs. $98.5 million in the prior-year period. Last year’s totals were heavily influenced by two SPAC IPOs: Stable Road ($150M) and Merida Merger I ($120M).
  • Largest Cap Raise: On November 5, 2020, Planet 13 Holdings (CSE: PLTH) (OTCQB: PLNHF), a company primarily known for its Las Vegas superstore which is believed to be the largest cannabis dispensary in the world, completed its previously announced C$28.8 million (US22.02M), bought-deal public offering of 6.7 million units at C$4.30 (US$3.29) per unit. Each unit consisted of one common share and one half of a subordinated share purchase warrant with a term of 24 months and an exercise price of C$5.80 (US$4.43) per share ( a premium of approximately 35%). We value this warrant at approximately C$.53 (C$.265 per unit) giving a net stock price of C$4.04. The stock closed at C$4.89 per share on the transaction date. Planet 13 was hit hard by the COVID 19 forced closure of its Las Vegas superstore in mid-March but has rebounded strongly since the store reopened in June. On November 9, the company announced that October had been its third consecutive month with revenues above $7.5 million, putting it on track for a strong close to the year. The stock has reacted accordingly, rising 88% YTD. Planet 13 now trades at approximately 4.27 times consensus 2021 revenue estimates, a premium to the 2.55 x we observe for the 14 U.S. Cultivation & Retail sector companies in the Viridian Value Tracker with market caps over US$100 million. We believe the company would find a strong reception in the debt markets as well. The Viridian Credit Tracker ranks PLTH as the 4th strongest credit of the 35 US Cultivation & Retail companies we track, with exceptional liquidity and the lowest market leverage.  COVID-19 revealed the company’s chief weakness - its reliance on the Las Vegas market, and the company is working to remedy this issue by expanding into California with the June acquisition of Newtonian Principals, a dispensary in Santa Ana, California.
  • Public vs. Private Cap Raises: All 3 of this week’s capital raises were closed by public companies. So far in 2020, public companies have accounted for 81% of all capital raises, vs. 65% for the same period in 2019. In 2020, public companies have accounted for 85% of total dollars raised, vs. 69% for the same period in 2019.  
  • Public Company Listings: Of the 3 public company capital raises, all are listed in Canada on (2 on the CSE and 1 on the TSX), and all 3 also trade on secondary exchanges (the OTC).
  • Equity vs. Debt Cap Raises: Equity-based capital raises accounted for 2 of this week’s 3 capital raises and 97% of the total dollars raised.
  • Largest Debt Capital Raise: On November 2, Avicanna Inc. (TSX: AVCN (OTCQX: AVCNF), a biopharmaceutical company which focuses on the research, development, cultivation, manufacture, and commercialization of plant-derived cannabinoid-based products and extracts for the use in medical, consumer health, and pharmaceutical industries internationally, closed an 8%, one-year, C$1.1 million (US$.83M) non-brokered convertible debenture financing that is convertible at $1.00 per share (a 10% premium). Investors also received 1 warrant for every $2 of the principal amount. The warrants have a 2-year maturity and a $1.50 exercise price (a 65% premium). Despite the 75% warrant coverage, the high premium reduces the value of the warrants to approximately 1.5% of the principal. The conversion option, however, given its low premium, is quite valuable raising the total effective cost of the offering to 17.96%. The Viridian Credit Tracker ranks Avicanna as the 8th strongest credit of the 17 Canadian Biotech companies we track with market caps under US$100 million. Low balance sheet liquidity and negative cash flow from operations combined to create an $8 million financing need in the LTM period and ongoing financings will continue to be required.

Cap Raises by Sector: The 3 capital raises this week were spread across 3 different industry sectors with one each in Cultivation & Retail, Infused Products and Extracts, and Biotech/Pharma.


  • Transactional Activity: We tracked no closed M&A transactions in week 45 but did note two significant announced transactions: TerrAscend (CSE: TER)(OTC: TRSSF) agreed to acquire 100% of the equity of HMS, a Maryland cultivator and processor of medical cannabis from Curaleaf for a total consideration of $27.5 million, and Ayr Strategies (CSE: AYR-A)(OTC: AYRSF) announced it is buying a vertically integrated operation in Arizona, including cultivation and processing facilities and three licensed dispensaries in a deal valued at $81 million. We continue to believe that a combination of new state legalizations, favorable stock market conditions, and SPAC activity will lead to increases in M&A activity in the remainder of 2020 and into 2021.


The Viridian Cannabis Deal Tracker is a proprietary information service that monitors capital raise and M&Amp;Amp;Amp;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&Amp;Amp;Amp;Amp;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&Amp;Amp;Amp;Amp;A transactions totaling over $45 billion in aggregate value.

*Copyright © 2020 by Viridian Capital Advisors

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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 ( 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&Amp;Amp;Amp;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&Amp;Amp;Amp;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.

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