The Week’s Largest Closed Equity Transaction:

• On February 1, 2023,  Leaflink (Private) announced the closing of a $100M Series D financing.
  • CPMG, L2 Ventures, and Nosara Capital were lead investors, with participation from existing investors.
  • Proceeds will enhance platform functionality to better support the company’s customers in approximately 50% of the U.S. wholesale cannabis industry in 30 different markets.
  • The new financing coincides with several management changes at Leaflink:
    • Co-founder & CEO Ryan Smith will become Executive Chairman
    • Co-founder and CTO Zack Silverman has been transitioned to a Senior Advisor role.
    • President & COO Artie Minson has been appointed CEO
  • The company’s offering center on Ketamine therapy but will be broadened to psilocybin and MDMA after regulatory approval.
  • The psychedelic sector has raised nearly $400M in the LTM that ended 1/27/23, up over 900% from the previous year. Viridian Capital divides the cannabis/CBD/psychedelics world into 12 subsectors, and psychedelics is the only one that has raised more capital in the current LTM period compared to the prior year’s LTM.
• Another Interesting Equity Raise:
• On January 30, Village Farms (VFF: Nasdaq), the eighth-largest Canadian LP by market cap, completed a previously announced direct offering for gross proceeds of $24.77M.
  • The offering of 18.35M shares at $1.35 per share included warrants for 18.35M warrants with a $1.65 exercise price (22.22% premium) and 5.5-year expiry. The warrant package is worth about $.38 per share. The net price of $.97 represented a 35.8% discount to pre-announcement prices, a fairly steep discount considering the size of the issue (20% addition to share count)
  • The implied enterprise value of $136M represents a .48x multiple to 2022 revenue estimates, below the .83x median for the 8 Canadian LPs with market caps over $100M.

Public vs. Private Raises: 

• Five of this week’s six capital-raising companies are public. Four trade in Canada (three on the CSE and one on the TSX), four trade in the U.S. (three on OTC and one on Nasdaq), and one trades on the Australian exchange.

Equity vs. Debt Cap Raises: 

• Equity accounted for four of this week’s six capital raises and 75% of the funds raised.