Cannabis SPACs Are Back!
This year's $600 million is the 2nd highest total capital raised since Viridian began tracking the cannabis industry in 2015.
The average transaction size has also accelerated to near record levels and is the proximate cause for the upswing in total capital raises. The number of capital raise transactions, although rising slightly from the doldrums of 2020, has actually been trending downward since 2018.
The previous peak of $1.1 billion was driven by two large SPAC IPOs: Subversive ($575M) and Bespoke ($350M). Similarly, this quarters upswing was fueled by three large SPAC IPOs: Tuatara ($175M), Silver Spike II ($250M), and Choice ($150M).
Viridian tracked approximately $3.9 billion of cannabis SPAC IPOs. Several SPACs have struggled to find large enough targets to meet their qualifying transaction thresholds and have been forced to put a number of transactions together and attempt tricky simultaneous transaction closes.
Viridian expected to see smaller cannabis SPAC IPOs, however, the first quarter’s activity ran counter to that expectation, suggesting an increased confidence on the part of sponsors that listing requirements may be done sooner than the required deadline(s).
SPACs Are Back!
Josh Kincaid, Capital Markets Analyst & host of your cannabis business podcast.
Episode 693 of The Talking Hedge:
Your Cannabis Business Podcast.
Covering cannabis products, reviews, business news, interviews, investments, events, and more.
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Josh is not an investment adviser. The Talking Hedge is long gold and silver. Listeners should always speak to their personal financial advisers.
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