OUR 9TH YEAR OF PROVIDING PROPRIETARY CAPITAL MARKETS INTELLIGENCE ON THE CANNABIS / HEMP / PSYCHEDELIC SECTORS
Equity Capital Raises
Equity Transaction Chart
Viridian publishes weekly data on equity capital raises in the Cannabis/CBD/Psychedelic industries. This data includes information about the company issuing equity (public/private, state/country location), deal size, deal structure, pricing, share information, deal implied valuation, and warrant information.
Week ended 07/07/2023
Week ended 07/07/2023
This Section is Only Available to Higher Tier Memberships
Please Purchase a Premium or Enterprise membership to see more.
Equity Commentary
Week ended 07/07/2023
The Week’s Largest Equity Transaction:
- On July 7, 2023, Ascend Wellness (AAWH.U: CSE)(AAWH: OTCQX), the tenth largest U.S. MSO by market cap, closed a $7M private placement of common stock.
- Ascend issued 9.86M shares at $.71
- The transaction implied enterprise value of $397M represents .83x 2023 consensus revenue estimates and 4.1x 2023 consensus EBITDA estimates. These metrics are significant discounts to the 1.51x 2023 revenue and 6.45x 2023 EBITDA medians for the eleven U.S. MSOs with market caps over $100M.
- Ascend ranks in the middle of our credit rankings but has excellent growth prospects due to its strong positioning in Maryland and new store growth prospects in Pennsylvania, Ohio, and Illinois.
- Proceeds will fund potential acquisitions.
A Punishing Equity Transaction:
- On July 3, the company closed a $4.3M public units offering, selling 4.048M units at $1.05 per unit.
- Each unit consisted of one common share and two five-year warrants with an exercise price of $1.05 (0% premium). Units deals are relatively common; the company usually offers ½ warrant or one warrant per unit. The warrant life is generally two years but occasionally stretched to 3 or 4. Combining two warrants per unit with five-year lives and 0% premium is unheard of. These terms tell us that the deal was Challenging to get done.
- An at-the-money, 5-year warrant on a $1.05 stock has a Black Scholes value of $0.357 using 30% volatility. On this basis, the net share price of the Greenlane deal was $.336, a 68% discount!!. Greenlane’s stock has fallen 63% since the deal was announced.
Public vs. Private Raises:
- All four companies that raised capital this week are public. Two trade in Canada on the CSE, and four trade in the U.S. (two on Nasdaq and two on OTC).
Equity vs. Debt Cap Raises:
- Equity accounted for two capital raises this week and 11.1% of the funds raised.
Week ended 07/07/2023
Additional content is available to Premium and Enterprise users. Please purchase a higher tier membership to see more.
Weekly Valuation Tracker
Viridian highlights a specific industry sector and provides a deep dive into valuation metrics and comparable company valuations for public companies operating in that sector. The Weekly Valuation Tracker provides proprietary, actionable valuation data.
- Week ended 07/07/2023
This week’s valuation tracker focuses on the 7 U.S. MSOs with market cap over $500M in the Viridian Value Tracker database in gauge the valuation impact of the 2nd earnings that have been released so far, Green Thumb (GTII: CSE), Curaleaf (CURA: CSE), and Trulieve.
- Week ended 07/07/2023
This Chart is Only Available to Higher Tier Memberships
Please Purchase a Premium or Enterprise membership to see more.
Additional content is available to Premium and Enterprise users. Please purchase a higher tier membership to see more.
This Chart is Only Available to Higher Tier Memberships
Please Purchase a Premium or Enterprise membership to see more.
Viridian publishes weekly insights on equity capital raises in the Cannabis/CBD/Psychedelic industries. These insights typically highlight the most interesting/meaningful equity transactions of that week, and commentary on market conditions, equity deal structures and investor groups.