THE GOOD FIGHT
Chris Webber, a five-time NBA All-Star and founder of Webber Wellness, is partnering with asset manager Jason Wild to launch a $100 million private equity cannabis fund. The goal is to invest in "underrepresented entrepreneurs pursuing careers in the cannabis sector. As our country moves closer to federal legalization, I believe it is more important than ever to empower the next generation of cannabis leaders in a tangible way.”
CONSOLIDATION IN CA - HEXO ACQUIRES ZENABIS
Transaction Highlights
TOP THREE LP
Based on HEXO's and Zenabis's most recent interim quarterly financial statements and results and those of the other top licensed producers in Canada, the combined organization would be a top-three licensed producer in terms of combined Canadian recreational cannabis sales.
FOOTHOLD IN EUROPE
The Transaction gives HEXO access to the European medical cannabis market through Zenabis's local partner, with an established facility in the European Union supplying pharmaceutical products to the European market. The facility also serves as a European Union Good Manufacturing Practice packaging and distribution center for medical cannabis products produced in Zenabis' Atholville Facility.
SYNERGIES
HEXO estimates that the combined entity may realize approximately $20 million annual synergies within one year of close. However, the cost of goods reductions, additional capacity utilization in HEXO's Belleville Centre of Excellence, and selling, general, and administrative savings, which, if realized, should allow HEXO to continue its path towards positive earnings.
STATE-OF-THE-ART CULTIVATION INFRASTRUCTURE
The proposed Transaction would give HEXO access to licensed capacity to produce approximately 111,200 kg of additional high-quality cannabis annually. The Transaction would result in HEXO acquiring two indoor facilities (approximately 635,000 sq. ft.) and access to a 2.1 million sq. ft. greenhouse facility, totaling about 2.735 million sq. ft. of near-term cultivation space offering diversified growing and production techniques.
Maryland cannabis bill in committee (TRSSF)
Maryland House lawmakers held their first committee meeting yesterday to consider the legalization of adult-use cannabis. Another marijuana legalization measure in the State Senate is scheduled for the committee on March 4. The House version cut the maximum number of retail licenses in half from 200 to 100 to align with the Senate version. The biggest remaining difference is the issue of unlimited microbusiness licenses. As of November 2nd, Maryland’s medical marijuana program had 118,762 certified patients, approximately 1.96% of the state’s population. The state’s medical marijuana sales have been robust, with high double-digit YoY growth. The state has ‘severe or chronic pain’ as a qualifying medical condition, a broad category that expands the potential patient base. Curaleaf recently sold one of its cultivation and processing assets in the state to TerrAscend.
