Cannabis Capital Raises Surging YoY On Small Ticket Rounds

The Viridian Cannabis Deal Tracker is an information service that monitors capital raise and M&A activity in the legal cannabis industry. Analyzing within 12 key industry sectors, the Viridian Cannabis Deal Tracker provides cannabis companies, investors, and acquirers with the data, trends, and intelligence they need to make informed decisions regarding deal valuations, terms, and structures. Since its inception, the Viridian Cannabis Deal Tracker has tracked and analyzed more than 2,400 capital raises totaling over $29 billion as well as more than 900 M&A transactions. Find it exclusively on Benzinga Cannabis every week!

INVESTMENT AND M&A ACTIVITY IN THE CANNABIS INDUSTRY

9/16/2019 - 9/20/2019

CAPITAL RAISES

• Fourteen raises closed this past week, totaling just under $81 million and outpacing the nine deals totaling just under $76 million from the same week last year. Though more overall capital was raised year over year, the average deal size declined due to a greater number of small transactions.

• Of the fourteen raises, half used equity structures, and half used debt structures. While in prior weeks we saw large debt raises by Cultivation & Retail operators, in this week the largest raises were closed by a digital media brand expanding into the branded CPG category as well as a cannabis testing laboratory that is looking to expand its services in the face of the recent vaporization scare.

• While we continue to see raises closed for both "touching the plant" and ancillary businesses, this week saw greater activity on the "touching the plant" side, predominantly because of several small raises in that segment.

MERGERS & ACQUISITIONS

• We tracked four closed M&A transactions this past week, only slightly below the six that closed in the same week in the prior year.

• All of the closed transactions involved private companies as the targets and public companies as the buyers, a prominent trend in the cannabis space.

• We continue to see acquisitions of non-cannabis-related businesses by those in the cannabis sector. This week, we saw another European medical cannabis business, XPhyto, acquire a non-cannabis drug distributor and importer, Vektor. We expect to see more acquisitions like these as cannabis companies look to capture valuable assets, technologies, or synergies from outside of the industry.

• United States operators in limited license states, such as Pennsylvania, continue to attract acquirer interest due to their favorable supply/demand market balance (larger markets with fewer competitors). This week, we saw the acquisition of Ilera Healthcare, a fully vertically-integrated operator in PA, by the multi-national operator, TerrAscend.

WEEKLY SUMMARY