Data: Despite A Lack Of M&A Activity, Cannabis Capital Raises Hit A YTD Record Last Week

The Viridian Cannabis Deal Tracker is an information service that monitors capital raise and M&A activity in the legal cannabis industry. Each week the Tracker analyzes/aggregates all closed deals and allocates each transaction to one of twelve key industry sectors in which the deal occurred (from Cultivation to Brands), the region in which the deal occurred (country or U.S. state), the status of the company announcing the transaction (public vs. private) and the type of deal structure (equity vs. debt). The Viridian Cannabis Deal Tracker provides the deal data/terms/valuations/structures and market intelligence that cannabis companies, investors, and acquirers utilize to make informed decisions regarding capital and M&A strategy. Since its inception in 2015, the Viridian Cannabis Deal Tracker has tracked and analyzed more than 2,500 capital raises and 1,000 M&A transactions totaling over $45 billion in aggregate value. Find it exclusively on Benzinga Cannabis every week!

INVESTMENT AND M&A ACTIVITY IN THE CANNABIS INDUSTRY

4/13/2020 - 4/17/2020

CAPITAL RAISES

Capital raise activity recorded its strongest showing for the year, with 17 transactions raising a total of $132.9 million, vs. 19 transactions totaling $210.4 million in the year-ago period.
Of the 17 capital raises, 12 (or 71%) were closed by public companies. This is lower than the 80% of capital raises that public companies have accounted for over the past six months, but still indicative that investors are choosing to invest in the cannabis sector through pubcos that offer greater liquidity.
Of the 12 public company capital raises, all were Canadian exchange listed.
Also bucking the trends we’ve been reporting on for the last six months is the fact that equity-based raises accounted for 13 of the 17 transactions (or 76%), higher than the 71% of equity-based capital raises that we’ve tracked over the past six months. This is likely indicative of the fact that a number of public cannabis stocks bounced off of their lows after the initial impact on stock prices from COVD-19, leading more public companies to accept equity deals (9 of the public company raises this period were equity-based structures).
Of the 4 debt-based transactions, 3 were convertible note structures which remain the dominant form of debt financing in the cannabis industry.
As compared to prior periods when companies in the Cultivation & Retail sector were accounting for more than 60% of all capital raises, this period showed much more diversity in capital allocation:
Cultivation & Retail: 7 cap raises
Infused Products & Extracts: 4 cap raises
Biotech/Pharma: 3 cap raises
Software/Media: 2 cap raises
Investments/M&A: 1 cap raise