Weekly Deal Watch: Cannabis firms hustle to expand, raise capital to support growth

Marijuana News

This weekly series from Marijuana Business Daily and Viridian Capital Advisors provides the latest data on cannabis investment activity and M&A, along with key takeaways, analysis and trends based on recent market moves.

The data below, provided by Viridian Capital Advisors, is through the week ended Oct. 19.

Capital raises key takeaways: 

  • Green Thumb Industries (OTC: GTBIF), a multistate marijuana firm, closed a bought-deal equity financing for 101.7 million Canadian dollars ($77.7 million). “The large dollar amount shows continued investor interest in U.S. operations,” said Harrison Phillips, vice president at Viridian Capital Advisors. Green Thumb said it plans to use the proceeds to build out its wholesale capacity and for strategic initiatives, including acquisitions.
  • Toronto-based Supreme Cannabis Company (TSXV: FIRE; OTC: SPRWFclosed a CA$100 million debt financing deal – capital it plans to use to expand existing facilities and develop new operations in Canada. Doing so will position Supreme to reach better “economies of scale,” Phillips said, noting that the firm is the only licensed producer in Canada pursuing a wholesale model by selling to other cannabis firms.
  • The Green Organic Dutchman (TSX: TGOD; OTC: TGODF), an Ontario-based cannabis producer, closed a CA$75 million equity financing deal. The firm plans to use the proceeds for expansion efforts, underscoring the developing trend of “Canadian firms raising money more for acquisitions than for internal growth,” Phillips said.

Merger & acquisition key takeaways: 

  • Harvest Medicine, a subsidiary of Vivo Cannabis, completed its acquisition of Trauma Healing Centers.
  • Origin House (CSE: OH), formerly CannaRoyalty Corp., completed an acquisition of California-based RVR Distribution. Cannabis firms have a strong desire to establish strong distribution networks in key markets, Phillips said. “When you look at companies like Coca-Cola or large beer companies, their influence comes in the form that they have such widespread distribution – which could be a very valuable asset (for Origin House) down the line,” he said.
  • Calgary-based Gabriella’s Kitchen (CSE: GABY) acquired California-based cannabis firm The Oil Plant. “Canadian firms continue to target the U.S. cannabis market,” Phillips said. Both Gabriella’s Kitchen and Origin House are among a growing number of publicly traded Canadian firms increasing their stakes specifically in the California market, where there are no residency requirements for ownership of cannabis businesses.

Viridian Capital Advisors is a financial and strategic advisory firm that provides investment banking, M&A, corporate development and investor relations services to emerging growth companies and qualified investors in the cannabis sector.