Viridian Capital Advisors is one of the world’s main financial and
strategic advisory firms for the cannabis industry. Benzinga recently had the chance to talk to the company’s founder and president
Scott Greiper, and one of its analysts, Harrison Phillips, who shared some insight into the legal marijuana market.
Deal Flow
Every week, Viridian published two reports, one tracking the performance of its Cannabis
Stock Index and another tracking the most recent investment and M&A activity in the marijuana industry.
As per the latest report, the week
of December 2–9 witnessed 23 cannabis-related announcements:
- 11 capital raises.
- Five M&A transactions.
- Two M&A and go-public transactions.
- Two joint ventures.
- One go-public transaction.
- One strategic alliance with a fund.
- One new fund for university cannabis research.
Even more interesting, the deals closed last week pushed the industry dollars raised since January above the $1 billion
threshold.
“Once again, we’re seeing significantly increased deal sizes this week, versus the same week last year,” Greiper commented. “So,
the three capital raises that we tracked (and closed) this week [reached] a total of $31.5 million, or about $10.5 million each
capital raise. Last year, the average deal size was a little over $800,000. So, there’s a maturity in the capital markets that’s
happening in North America in terms of frequency of transactions and size of transactions.”
Capital raises were seen in Organigram Holdings Inc (CVE: OGI) (OTC: OGRMF), Tetra Bio-Pharma Inc (CNSX: TBP) (OTC: GRPOF) and Players Network (OTC: PNTV).
Moreover, Viridian’s president continued, the number of M&A transactions goes on to surge as well. “We are reporting four
M&A deals that closed. Last year, at this point in time, there were zero.”
M&A transactions this week included:
-
iAnthus Capital (CNSX: IAN) (OTC: ITHUF)’s acquisition of Organix, LLC.
- Emblem Corp (CVE: EMC)’s reverse merger into Saber Capital Corp.
- CannaRoyalty (CNSX: CRZ) (OTC: CNNRF)’s open in the Canadian Stock Exchange and its acquisition of 70
percent of Achelois, LLC.
-
PharmaCan Capital Corp (CVE: MJN) (OTC: PRMCF) and Canadian First Nations' joint venture, Indigenous Roots.
Well Funded Sectors
Benzinga moved on to ask about sectors attracting the most capital.
As seen in the year-to-date chart embedded above, “biotech continues to be the sector leader in terms of attracting the most
capital, attracting a little over $0.40 of every dollar of invested capital this year,” Greiper revealed.
“Second to that is cultivation. For the
reasons I described regarding the AgTech sector, cultivation facilities are getting larger and more sophisticated, they are
attracting smarter dollars, and those smarter dollars are mandating that the cultivation facilities, because they are competing on
price, are adopting and embedding more advanced technologies,” he added. “Cultivation is attracting about $0.30 of every invested
dollar of capital this year.”
IIPR’s IPO
Finally, Benzinga asked about Innovative Industrial Properties Inc (NYSE: IIPR)’s IPO, which marked
the first time a marijuana-related stock traded in a major stock market.
“We have two thoughts on that (and, again, we are not commenting on the company itself, just on the capital markets
transaction). [First off, we believe it is] very positive that a major exchange would allow its first cannabis company IPO,”
Greiper responded. “It’s a real estate play, so it’s not touching the plant in that regard. But, nonetheless it’s a cannabis real
estate investment trust, so, I think it’s another step along the evolution of this market in general, and another step along the
evolution of the capital markets in this industry.
“The flip-side of that is that the company priced the transaction at roughly half of what they initially intended to go out
with. So, clearly there was some pressure on filling the book and getting the pricing done in the initial range they had filed.
[Having said this], I would have to believe that the timing was a bit unfortunate for Innovative Industrial Properties, because of
the announcement by Mr. Trump of Jeff Sessions as a potential AG, and the concern that that caused in the marketplace," he
concluded.
Liked this interview? Check out our conversation with Blues Traveler's Brendan, who shared the story of one
of his best joints ever, which he smoked with Metallica, Neil Young and Marilyn Manson.
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.