Equity Raises:

• On July 29, 2024, Mercer Park Opportunities Corp.(SPAC.V: TSX), a cannabis SPAC, announced that it raised $200M in its IPO of SPAC units.
• Twenty million units were sold at $10 per unit.
• Each unit consists of one Class A Restricted Voting Share and one 5-year warrant with an exercise price of $11.
• Mercer Park Opportunities will principally look for acquisitions in the U.S. Cannabis industry with total enterprise values of up to $1 billion.
• The prospectus mentions the potential for investment in rescue financing situations, roll-ups, and companies that will benefit from the continued regulatory changes occurring in the industry.
• The SPAC has up to 18 months to complete a qualifying transaction utilizing at least 80% of the raised funds.
• The size of the IPO makes finding a single target quite tricky, but simultaneously closing on multiple acquisitions is equally challenging.
• We appreciate the timing of this deal. Equity prices have hardly reacted to S3, and capital (especially equity) is still relatively scarce.
• Still, the track record of previous cannabis SPACS is anything but inspiring.

Public vs. Private Raises: 

• All four capital raisers this week were public companies.

Equity vs. Debt Cap Raises:

• Equity accounted for 51.2% of the week’s capital raise activity.