The Valens Company completes acquisition of Leading US CBD Company, Green Roads

Weedmaps slumps (-8.5%) after SPAC deal. Mercer Park Brand Acquisition Corp. sets closing date for Merger with Glass House Group. Charlotte's Web appoints former Canopy CFO to Board.


Top News

Weedmaps parent company slumps after SPAC deal. MAPS was down -8.5% today after it’s SPAC deal closing / name change (SSPK to MAPS) pop.

Mercer Park Brand Acquisition Corp. — Sets Closing Date of June 29th for Merger with Glass House Group. An amended Merger Agreement containing minor modifications to facilitate closing arrangements will be filed with Canadian securities regulatory authorities shortly. The business combination of Mercer Park Brand SPAC and GH Group will create the largest cannabis brand-building platform in California. The combined company has planned expansions to reach 6 million sq ft of cultivation in state-of-the-art greenhouses, representing by far the largest capacity of any cannabis operator in California and an anticipated retail footprint of 21 operational dispensaries by Q1 2022, more than double the next largest retail operator in the state.

New Report Finds First-Time Cannabis Use Surging Among Women And Gen Z. First-time cannabis users are diving into their new habit with unparalleled gusto, according to a new study, U.S. Cannabis Consumer Trends Report from Brightfield Group. 50% of new consumers are indulging in cannabis five or more days per week, while 22% of new consumers are using multiple times per day. Also, female cannabis consumers skew younger and are heavier users than men. Jamie Schau, senior insights manager at Brightfield Group, said the expanded, gender-balanced demographics of cannabis usage is showing normalization, increase in popularity and diversity. In addition to the surge in usage among women, 6% of recreational cannabis consumers in 2020 were new users while 22% were Gen Z'ers.

Maine’s mom and pop weed scene sweats corporate “gentrification.”

Maine is in the process of introducing more stringent regulations that would treat all medical marijuana businesses — from small mom and pops to billion-dollar behemoths — nearly the same. Many of these small businesses, known as “caregivers,” fear the proposed rules will quickly push them out of the market in favor of corporate cannabis. There are now more than 3,120 caregivers licensed in the state, employing more than 5,200 people. Marijuana has become Maine’s No. 1 agricultural commodity and a $200 million industry. Caregivers account for more than 75 percent of those sales. But the slate of proposed regulations include stricter security requirements, stiffer fines and mandatory seed-to-sale tracking of all marijuana products. State lawmakers are also pushing to expand mandatory testing for contaminants to the medical marijuana market.

Two convicted in Eaze bank fraud case sentenced to prison. Two businessmen convicted in March of committing bank fraud related to payments made to California-based marijuana delivery giant Eaze were sentenced to prison by a New York district judge. Hamid Akhavan and Ruben Weigand were sentenced to 30 months and 15 months in prison, respectively, for tricking banks into processing more than $150 million in credit card payments for Eaze. As part of the sentencing, Akhavan was ordered to surrender $17 million and fined $100,000. Weigand was fined $50,000 and agreed to forfeit $300,000. The sentences were far below what federal prosecutors had recommended to the judge overseeing the case. Akhavan and Weigand orchestrated the fraud from 2016 to 2019 on behalf of Eaze by disguising the charges to banks in the form of fake websites and dummy corporations.

Charlotte's Web — appoints former Canopy Growth Executive, Tim Saunders, to Board of Directors. Tim Saunders was CFO of Canopy Growth Corporation from its entrepreneurial beginning and led its public up-listing to the Toronto Stock Exchange, and subsequently to the New York Stock Exchange – both firsts for the cannabis sector.  During his tenure he oversaw more than C$6.4 billion in financings, 31 acquisitions, and an increase in market capitalization from ~C$100 million to C$20 billion, as the world's largest cannabis company. Mr. Saunders retired from his role at Canopy in May 2019 after four years with the Company. Most recently Saunders was CFO for Collective Growth Corporation, a SPAC which successfully raised $150 million and recently completed a merger and public listing on the Nasdaq at a capitalization of $1.4 billion. As a part of this venture Mr. Saunders evaluated dozens of hemp businesses around the world from over 170 potential targets reviewed, gaining a deep perspective on the developing global hemp supply chains and related regulatory status across several countries.

Cresco Labs — Opening of Sunnyside Philadelphia, Its Fourth Dispensary in Pennsylvania and 33rd Operating U.S. Store. The medical-only cannabis store is located at 1221 Chestnut St. in Philadelphia. It is in the former historic Cathay Tea Garden Restaurant building which is centrally located and steps away from the heart of downtown. Cresco’s other Sunnyside dispensaries are in Butler, Pittsburgh and New Kensington. Sunnyside Philadelphia will feature 10 points of sale with more than 5,500 square feet of space and an array of medical cannabis products displayed by form and function. In addition to its retail network in Pennsylvania, Cresco Labs continues to distribute its portfolio of branded products to 100% of dispensaries throughout the state.

Ayr Wellness — Opens Third Pennsylvania Dispensary in Gibsonia, PA. The Ayr Wellness dispensary is the third in the state opened by CannTech PA, LLC, a wholly-owned Ayr subsidiary. The 8,000 sq. ft. facility has 45 parking spaces and is designed to fit up to 30 point-of-sale (POS) stations. 

New Standard Cannabis — Flagship Hazel Park Location wins First Place in Detroit Design Awards. New Standard cannabis continues to set the standard for cannabis culture in Michigan winning first place at the 17th Annual Detroit Design Awards. New Standard was also the only cannabis retailer to be named in the retail interior design of a boutique, store or salon category. New Standard opened its first provisioning center in Hazel Park in April of 2020. Expanding across Michigan with current locations in Grand Haven, Hazel Park, Edmore, Nunica and Sand Lake,  New Standard is a welcoming space where product specialists educate and guide consumers.

Canada proposes restrictions on some flavored cannabis vapes starting in 2022. The proposed changes were highlighted in a Regulatory Impact Analysis Statement (RIAS), posted June 18. These changes were expected by industry based on previous guidance from the government.  These proposed amendments would restrict the production, sale, promotion, packaging, or labelling of inhaled cannabis extracts from having a flavor “other than the flavor of cannabis” and would apply equally to inhaled cannabis extracts sold for both medical and non-medical purposes. Although on the surface these changes appear quite strict, they are written in a way that still allows smells and flavors associated with cannabis to be used, either from cannabis-derived or non cannabis-derived sources, says one industry expert.

Podcast: CannaInsider — A Wave of Capital Is Heading for Cannabis, Insider Gives Details. Is cannabis the largest investment trend of this generation? Here to tell us why we’re about to see a wave of capital move into the industry is Todd Harrison of CB1 Capital.

Cannabis Cocktails Will Be Everywhere—But Are They Even Any Good? Bartenders have been so quick to see whether they could incorporate marijuana into drinks, they didn’t stop to ask whether they should. 


Deals

The Valens Company — Completes Acquisition of Leading US CBD Company, Green Roads. The cash and share transaction consideration totaled $40 million (~1.8x 2020 revenue), plus up to an additional $20 million in contingent consideration payable upon the purchased business achieving certain EBITDA milestones. If all the Milestones are met in 2022, the transaction represents ~4.5x fiscal 2022E EBITDA.


👋 Newsletter curated by Dai Truong.