Marijuana SPAC Choice Consolidation to wind up without making acquisitions

Choice Consolidation Corp. is winding up its business and backing away from any marijuana industry acquisitions, the industry special purpose acquisition corporation (SPAC) announced.

The Chicago-based company raised $150 million in capital for U.S. cannabis acquisitions via a 2021 initial public offering.

Now, however, the company’s board “(does) not believe that an appropriate qualifying transaction can be identified and completed within the company’s permitted timeline,” Choice said in a news release.

Choice was led by CEO Joe Caltabiano, the Cresco Labs co-founder who stepped down as president of the marijuana multistate operator in 2020 and subsequently resigned as a director.

“While the creation of the legal and regulated cannabis industry presents the opportunity to harness growth potential of a burgeoning industry, the current shifting market conditions and partisan political gridlock have made our current pathway too unpredictable,” Caltabiano said in a statement.

He added that he looks “forward to unlocking future opportunities in the industry.”

Holders of Choice restricted voting units will automatically redeem the value of those units, which will be delisted from the Canadian NEO Exchange (CDXX.UN.U) and U.S. over-the-counter markets.

Choice held $172.5 million in cash as of March 31, according to a regulatory filing.

Choice had intended to target acquisitions in states with limited numbers of marijuana licenses, where “the company was looking to acquire single-state operators, distressed assets and rehabilitation licenses,” according to the release.

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“However, current conditions favor single-state operators maintaining the status quo until capital is flush to create operating scale,” the company noted.

“When favorable tax benefits are available and cannabis marketing and branding is normalized nationwide, conditions will improve for single-state operators to enter the public market.”