CGC buying SPRWF but why?
We are removing CGC from the LONG bias list
If you are thinking that you can enter the US market in the next 6-12 months why are you diluting shareholders by adding assets in a market that has too much weed? To that end why are you paying up for a premium product when value is winning and premium brands only account for 10% of the Market?
CGC is buying The Supreme Cannabis Company, Inc. (SPRWF) because it not the largest cannabis company in Canada. In a deal valued at approximately $435 million on a fully diluted basis, Supreme Cannabis shareholders will receive 0.01165872 of a Canopy common share and $0.0001 in cash. Supreme Cannabis’s portfolio of brands includes 7ACRES, 7ACRES and minor brands Craft Collective, Blissco, sugarleaf, and Hiway. In March 7ACRES accounted for 93% if sales in those brands. The combination of Canopy Growth with Supreme Cannabis’ "top position" in Canada will lead to a pro forma Canadian recreational market share of 13.6% according to a company statement based on Headset data. This includes 7ACRES which is Canada’s number one premium flower brand, number one in PAX vapes, and Top-5 in pre-rolled joints. The company said that the combined pro forma market share is estimated to be 23.3% of the premium flower segment in Ontario and 21.4% in British Columbia. However, Canopy Growth noted that cost synergies will not be felt for another two years and those are expected to be in the $30 million range.
TX Expands indications for its medical program
The Texas House Committee on Public Health passed a bill Wednesday that would include more patients in the Texas Compassionate Use Program (TCUP) for medical cannabis. House Bill 1535, authored by Fort Worth Republican Rep. Stephanie Klick, would grow the Texas Compassionate Use Program by including patients with any type of cancer, not just terminal, PTSD in veterans and chronic pain that would otherwise be treated with an opioid.
NEW Cannabis SPAC
Mercer Park Brand Acquisition Corp. (BRND) a (SPAC) with the intent to focus on branded product businesses in cannabis and/or cannabis-adjacent industries, has entered into a definitive agreement to acquire Glass House Group (“Glass House” or “GH Group”), a vertically integrated, California-based cannabis company, and all related assets for total consideration of approximately US$567 million. It is a condition of closing the business combination that the resulting company’s shares will be listed on the NEO Exchange (under the ticker symbol GLAS.U). Subject to the satisfaction of all required conditions, the transaction is expected to close in the first half of 2021.
We have significant respect for BRND Chairman, Jonathan Sandelman, but don't know much about Glass House. We will spend more time on this deal over the weekend.
