🕶️r/WallStreetBets moves to Cannabis. Single Investor buys $100M of GTI stock. Another Cannabis SPAC.
🕶️r/WallStreetBets moves to Cannabis. Single Investor buys $100M of GTI stock. Another Cannabis SPAC.
Silver Spike Acquisition II — $250M. Tuatara Capital Acquisition — $175M. urban-gro — $54M IPO. Canopy, Aurora report earnings.
I’m going to say the GME move to Weed Stocks lasted a week as I’m not sure retail investors are ready for another week of roller coaster gains/losses (Diamond Hands 💎🙌 crowd quickly shrinking here). As every investor who’s been interviewed this past week has said, these moves were based on reddit hype rather than fundamentals, directed at the right industry, but wrong companies (mostly LPs vs. MSOs).
The top 3 movers from last week:
MedMen (MMNFF): 1-Week Max Gain: +239%
Sundial (SNDL): 1-Week Max Gain: +250%
Tilray (TLRY): 1-Week Max Gain: +161%
🌿Industry
Billionaire Beau Wrigley Says His Cannabis Company Will Be Bigger Than The Family Candy Business. Shortly after being pitched Cannabis as an investment opportunity in 2017, billionaire William “Beau” Wrigley Jr. led a $65M investment round in Surterra, and in November 2018, replaced the company’s cofounder as CEO. Renamed Parallel, Wrigley’s company now has 42 dispensaries across three states, with 39 in Florida and the rest in Massachusetts and Nevada, with new ones slated to open in Pennsylvania and Texas. To date, it has raised a total of $400M largely from Wrigley and other high-net-worth individuals. The latest funding round, which closed in 2020, valued the $250M company (2020 sales) at an estimated $2B. In 2019, Parallel spent more than $100 million on a Boston-based startup, Molecular Infusions, which is working on a THC-infused seltzer. Parallel is also in talks for a roughly $150M acquisition of a dispensary chain in Chicago (4Front Ventures, Justice Grown or IESO are the guesses), which would bring the company to the city synonymous with the Wrigley name. It’s also exploring going public in Canada via a SPAC deal, according to two people with knowledge of the discussions. Wrigley denies that the company will go public.
Concentrate sales up 40% in 2020 across CA, CO, NV, WA & OR. Total sales of concentrates increased from $567M in 2019 to $797M in 2020, according to Headset. The average item price for a concentrate product at the wholesale level increased by 7.3%, from $18.35 in 2019 to $19.68 in 2020, according to Leaflink. As legal marijuana markets mature, so follow the consumption habits of the consumers in those states. The concentrates category is typically thought of as the next level for the experienced cannabis connoisseur.
Other highlights:Colorado Marijuana Sales Almost Hit $2.2B in 2020
Colorado awards first adult-use cannabis delivery license
Cory Booker Touts Marijuana Reform Record After Being Named Chair Of Key Senate Subcommittee
New Mexico legalization bill for recreational use cannabis clears House committee
Prospects for adult-use cannabis legalization loom large in Connecticut
Treez — 2X rise in GMV to $2B in retail sales was achieved through 4.5M unique customers
South Dakota governor plans to delay medical pot law a year
Ayr Strategies — Corporate Name Change to Ayr Wellness
💵Deals
Green Thumb Industries (GTI) — $100M raised from single institutional investor. GTI (OTCQX: GTBIF) announced that its Form S-1 registration statement relating to the potential sale of up to 10,000,000 of its subordinate voting shares has been declared effective by the U.S. Securities and Exchange Commission (SEC) as of February 8, 2021. Shortly following becoming effective, GTI received and accepted an offer from a single institutional investor to purchase ~3.1M subordinate voting shares at $32.03/share for $100M.
Silver Spike Acquisition II (SPKBU) files for $250M IPO. Silver Spike Acquisition II, the second blank check company formed by Silver Spike Capital targeting the cannabis industry to raise up to $250M in an IPO. At the proposed deal size, Silver Spike Acquisition II would command a market value of $313M. The company is led by CEO and Chairman Scott Gordon, the founder and CEO of Silver Spike Capital and the co-founder and Chairman of Egg Rock Holdings, and President and Director William Healy, the former President of Pantera Capital Management.
Tuatara Capital Acquisition Corp. (TCACU) prices upsized $175M IPO. Tuatara Capital Acquisition, a blank check company formed by Tuatara Capital targeting the cannabis industry, raised $175M — offering 17.5M units at $10.00/share. The company offered 2.5M more units than anticipated. Each unit consists of one share of common stock and one-half of a warrant, exercisable at $11.50. J.P. Morgan and BMO Capital Markets acted as lead managers on the deal.
Jushi — Closing of C$75M Offering. 7,475,000 subordinate voting shares at a price of C$10.00 per Offered Security for total gross proceeds of C$74,750,000, which includes the full exercise of the over-allotment option granted to the underwriters.
urban-gro — $54M IPO. urban-gro (NASDAQ: UGRO) is a leading global horticulture company that engineers and designs commercial Controlled Environment Agriculture (CEA) facilities and integrates complex environmental equipment systems into these high-performance facilities. The Company sold 5,400,000 shares at $10.00/share.
Columbia Care — C$25M Bought Private Placement Offering. 2,800,000 common shares at a price of C$9.00/Share for C$25.2M. It is expected that the Offering will be primarily sold to one large institutional investor.
SOL Global Investments (OTCPK: SOLCF) finalizes divestitures of securities in Bluma Wellness (CSE: BWEL.U). The consideration received per Common Share and per Warrant under the Dispositions was $1.00, for total consideration of ~$23M. The completion of the Dispositions resulted in the Company’s beneficial ownership of, or control or direction over, the Common Shares and Warrants to decrease below 10% of the issued and outstanding Common Shares on a partially-diluted basis. SOL also provided an update on Verano, saying it will hold 25.2M shares of the Resulting Issuer.
IIP Expands Long-Term Real Estate Partnership with Kings Garden. IIP will acquire ~3.5 acres in Southern California adjacent to one of IIP’s properties leased to Kings Garden, where IIP and Kings Garden will partner on the development of two additional buildings totaling ~180,000 square feet of industrial space. The purchase price for the land was ~$1.4M. Concurrent with the closing of the purchase, IIP amended its existing lease at the adjacent property to incorporate this new project, and Kings Garden intends to operate the two new buildings as licensed cannabis cultivation facilities upon completion of development. IIP is expected to provide reimbursement to Kings Garden for the construction of the two buildings of up to ~$51.4M. IIP leases six properties to Kings Garden, representing ~544,000 square feet of industrial space and a total commitment of ~$147.7M.
Other highlights:AFC Gamma — raises deal size by 19% ahead of $119M IPO
Village Farms International — Fully repays Promissory Note related to Pure Sunfarms acquisition and makes additional investment in Asia-Pacific Partner, Altum
Power REIT — Closes Rights Offering and Raises $36.7M
Red White & Bloom — arranges ~$13.5M to finance its closing costs for IL acquisition
SLANG Worldwide — $11.9M oversubscribed private placement
MedMen — retains Moelis as Financial Advisor
Verano — Completes RTO/Merger with AltMed, to commence trading on February 17, 2021
WeedMD — $15M Bought Deal Equity Financing
Fire & Flower — $15M ATM Equity Offering
The Flowr Corporation (OTC: FLWPF) — $10M Bought Deal Public Offering
1933 Industries (OTCQB:TGIFF) — $2.8M Bought Deal Private Placement of Units
Agrify — Offers New Data Insights Through Partnership with Confident Cannabis
📄Earnings
Canopy Growth — Q3 FY2021
Revenue: $153M, up 23% Y/Y
Net Loss: ($829M), a $720M wider loss Y/Y, driven primarily by impairment and restructuring charges and other related charges of $416M, of which $382M relates to the announcement on December 9, 2020. Of the total impairment and restructuring charges recorded during Q3 2021, ~15% was a cash charge. Additionally, Other Expense totaled $291M during Q3 2021 stemming from non-cash fair value changes, mostly driven by the Company's higher stock price
Adjusted EBITDA Loss: ($68M) compared to a loss of ($97M) in Q3 2020 driven by net revenue growth and a decline in operating expenses
Cash: $1.6B at December 31, 2020, representing a decrease of $390M from $2B at March 31, 2020 reflecting the EBITDA loss and capital investments
Aurora — Q2 FY2021
Total Cannabis Net Revenue: $70.3M, up 11% over Y/Y
Medical Cannabis Net Revenue: $38.9M, up 42% Y/Y, Driven by a 562% Increase in High Margin International Medical Sales
Adjusted EBITDA Loss, excluding Provisions and Termination Costs: ($12.1M), Represents an Improvement of $53.1 Million Over Q2 2020
Cash: $565M
Canopy Rivers — Q3 FY2021
Comprehensive income of $82.2M driven by significant increase in value of investment in TerrAscend
On December 21, 2020, Canopy Rivers entered into a definitive agreement with Canopy Growth (NASDAQ: CGC) pursuant to which Canopy Rivers agreed to sell its interests in TerrAscend and TerrAscend Canada, Vert Mirabel, and Tweed Tree Lot to Canopy Growth for $115M in cash, up to 3.75M common shares in Canopy Growth, and the cancellation of Canopy Growth's multiple voting shares and subordinated voting shares of Canopy Rivers
The CGC Transaction represents a return on invested capital of ~5.6x and an IRR of ~101% as at the time of announcement. Following the anticipated close of the CGC Transaction, the Company expects to have ~$310M in net cash and liquid securities on a pro forma basis
🧔People
Aphria — Strengthens Leadership Position in Germany. Denise Faltischek, Aphria's Chief Strategy Officer, will also assume the role of Managing Director of Aphria Germany. Faltischek joined Aphria in September 2019 with extensive consumer-packaged goods experience and expertise leading over 50 acquisitions. She leads Aphria's global business strategy and oversees Aphria's medical and international business segments as well as quality function.
HEXO Corp appoints Charles Bowman as General Manager of US operations. Bowman has held senior leadership roles at leading global ingredient suppliers including BGG and Solix Algredients (Natural Antioxidants), Solazyme, now TerraVia (Algae Oils & Protein s), CP Kelco, and Cargill (Hydrocolloids).
🏬New Store Openings / New Product Launches
Curaleaf —Jacksonville, FL (36th in FL, 100th nationally)
Curaleaf — Bangor, ME (3rd dispensary in ME, 101st nationally)
Trulieve — Jacksonville, FL (74th dispensary in FL, 79th nationally)
Vireo (Green Goods) — Burnsville, MN and Woodbury, MN (8 dispensaries in MN)
High Tide — Calgary, FL (70th in Canada)
Sweet Flower partners with Barb & Star Go To Vista Del Mar as women lead category growth. Each curated kit, sold in a branded tote for $75, also contains a link to watch the film.
Retired NFL Star Marshawn Lynch Joins Celebrity Weed Game With Dodi Brand Blunts. The company’s first product, THCa diamonds-infused blunts, will go on sale at Bay Area dispensaries next month and is made using an organically grown Zkittles marijuana strain curated by Lynch and his friends. The blunts come rolled in a palm leaf wrapper, his preferred method of smoking.
💻Hiring
CanopyBoulder — Managing Director (Boulder)
Verano Holdings — Associate General Counsel, Corporate (Chicago)
Jushi — Category Manager (Remote)
🤷♂️Somewhat Relevant
Mind Cure — Closes $23M Bought Deal Offering