Marijuana Business Magazine November-December 2019

Marijuana Business Magazine | November-December 2019 24 What are some of the lessons you have learned since you started investing in the space? There is no substitute for good management. Good products and good ideas don’t always overcome bad management. Which sectors are you and Bryant Park most attracted to currently? Our fund has three areas we are focused on, all tied to providing growth capital to great companies that provide our investors with excellent risk-adjusted returns: 1. Senior secured debt for asset-heavy companies that realize debt is less dilutive and less expensive than equity. 2. Brands: This is a consumer-product industry, and great brands will be successful. 3. Other opportunities that support great management teams with great strategies that aren’t 1 or 2. How has the industry recently changed? The contraction in valuations and new rigor being applied by investors have caused the management and owners of cannabis companies to be more open to a disciplined business approach. That has been good for all parties. Are you making any cannabis investments outside North America? Not at the moment. We think there are plenty of opportunities in North America alone. BIG HITS Aurora Cannabis Secures $120 Million Loan Alberta-based Aurora Cannabis, one of the largest marijuana companies in the world, in September closed an expansion of a loan deal with three of Canada’s biggest banks. Aurora said it closed term loans worth an additional $120 million (CA$160 million) with a syndicate of lenders led by the Bank of Montreal, plus an option to upsize the facility by about $30 million (CA$40 million). That money is on top of an original $150 million (CA$200 million) in credit facilities Aurora secured last year. The total debt deal, now worth as much as $300 million (CA$400 million), is one of the industry’s biggest debt arrangements as large cannabis firms in Canada turn to traditional lenders. Multistate Operator Raises Up to $100 Million iAnthus Capital Holdings, a New York-based multistate operator and investment group, announced a $100 million financing plan to back its growth in core markets. Only $20 million of that figure, funded by Gotham Green Partners (GGP), currently is being raised. Another $66.5 million could be raised by GGP if it chooses to purchase such a value in debt notes. iAnthus said it has the option of raising another $13.5 million but did not give any details as to how that would be accomplished. The $100 million funding is needed for the company to achieve its plan of building out an additional 12 dispensaries in the next six months. Cannalysis Raises $22.6 Million for Testing Expansion California-based testing lab Cannalysis raised $22.6 million to fund its expansion in the state as well as its entry into other marijuana markets in the United States. The Santa Ana-based company raised the money from CanLab, a cannabis-, hemp- and CBD-testing laboratory network. The raise, which is seen as unusually large for a lab, also will help fund the company’s ongoing automation of cannabis-testing services. Nick Thomas covers finance for Marijuana Business Magazine. You can reach him at nickt@mjbizdaily.com. $250MILLION Estimated value of the all-stock acquisition of privately held PharmaCann by Los Angeles- based multistate operator MedMen when the deal fell through Oct. 8, 2019. The original price tag of the deal when first announced Oct. 11, 2018, was $682 million. The failed transaction came just a few weeks after it appeared to have overcome antitrust hurdles and was set to close at the end of 2019. The cancellation of the deal comes against a backdrop of falling stock prices in the cannabis industry and problems raising capital. Money Matters | Nick Thomas