OUR 8TH YEAR OF PROVIDING PROPRIETARY CAPITAL MARKETS INTELLIGENCE ON THE CANNABIS / CBD / PSYCHEDELIC SECTORS

Capital Raises

Past Charts

Capital Raises

Capital Raises Summary

Each week, Viridian publishes insights and analysis on completed capital raise transactions in the prior week, focusing on all equity and debt deals. Our analysis includes:

  • YTD Analysis
  • Sector Focus
  • Capital Raises vs Equity Prices
  • Outlook
  • Sector and Company Performance
  • Capital Raises by Sector

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YTD Analysis

Week ended 03/25/2022

  • Transactional ActivityThere were three fewer transactions and a $57.5 million lower volume than the prior week. Compared to last year’s same week, six fewer transactions closed with a $3.2 million higher volume. The average deal size was $28.3 million this week vs. $6.7 million in the same week last year.
  • The ongoing tumultuous news cycle of war, inflation, new covid strains, etc. was overlaid with a week of relatively disappointing earnings, a delay in the New Jersey rollout, the reintroduction of the MORE Act back to the House, and perhaps most importantly, the announcement of another blockbuster M&A deal, Cresco/Columbia. Amazingly, the cannabis equity market shrugged all of this off to finish the week nearly flat, up 0.43%.
  • Total capital raises for the first twelve weeks of 2022 total $1.20B, down 74% from $4.56B last year. Reduced equity issuance (down 86% y/o/y in the U.S. and 97% in Canada) was partially compensated for in the U.S. by solid debt issuance (up 401% y/o/y, however, Canada’s debt decline of 93% brought total debt issuance down as well. As the graph below shows, capital raises for the first twelve weeks of 2022 were dominated by U.S. activity. A higher percentage of capital raises came from international locations than we have seen in any recent year’s first quarter.

  • This week, there were only two closed capital raises a $56.5M Venture Funding Round by Good Day Farm Arkansas and a $0.15 Convertible debt by Neuropathix, Inc.

  • The graph above shows the dramatic change in the financing environment over the last year. The first 12 months of 2021 had seven weeks when more than $200M of capital was raised, and the dark bars in that period indicate that most of that capital was equity. The markets were bubbling with the hope that federal legalization was close at hand. But from the crack in prices in mid-February 2021, the bars became increasingly lighter in color, as debt became the majority financing source. There has been only one week with more than $200M in capital raised so far in 2022m, and most of it was debt.

  • The decline in capital raises has affected all subsectors in the market. Cultivation has always been the largest sector, and its percentage share of raises has remained stable at around 60% over the last year.

 

  • Cap Raises by Sector:
          

Market Commentary and Outlook

This Week Sector Focus

Capital Raises vs Stock Prices

Best and Worst Stock Performers