A $1.9 Billion Canadian IPO Could Make LA the 'Center of the Cannabis Universe'

Pat Maio
Pat Maio has held various reporting and editorial management positions over the past 25 years, having specialized in business and government reporting. He has held reporting jobs with the San Diego Union-Tribune, Orange County Register, Dow Jones News and other newspapers in Ohio, West Virginia, Maryland and Washington, D.C.
A $1.9 Billion Canadian IPO Could Make LA the 'Center of the Cannabis Universe'
Photo by Tim Foster on Unsplash

Ceres Group Holdings is becoming corporate America's biggest cannabis dealmaker out of its Century City offices.

The venture and private equity firm this week announced that its special purpose acquisition company, or SPAC, would take Atlanta-based cannabis producer Parallel public in a merger that will value the Canadian-listed company at $1.88 billion.

Parallel has about 42 retail stores outside of California, but has big plans for a big expansion into L.A. sometime in the next year or two.


The Parallel deal comes just as Ceres is trying to ink a separate deal to raise $100 million in a private fund to make cannabis investments throughout America, with particular focus on L.A. and California-based companies generally, according to Joe Crouthers, CEO of Ceres and head executive of the SPAC that bought Parallel.

"Parallel realizes that California, especially L.A., is the center of the cannabis universe," Crouthers said. "There's no presence in Southern California, but you will see one in the near future." A spokesperson later called to clarify that there are no immediate plans to enter the market.

Joe Crouthers is the CEO of Ceres and head executive of the SPAC that bought Parallel.

The new private fund is called Ceres Harvest II, and follows a prior fund that raised roughly $35 million to make investments in privately held cannabis companies — including Los Angeles-based pre-roll maker Palms, San Francisco-based edible company Rose Los Angeles, and Culver City-based dispensary MedMen Enterprises Inc. -- before it went public in May 2018.

Crouthers declined to disclose potential targets for the second fund.

The Ceres SPAC, officially known as Ceres Acquisition Corp., began trading last April, joining a wave of publicly traded companies that have moved to Canadian stock exchanges in recent years while they await the easing of U.S. rules on the cannabis sector. "That's the ultimate goal: to move to a U.S. exchange," Crouthers said.

The combined Ceres Acquisition Corp. and Parallel, which expects to generate $450 million in revenue in 2021 and report $100 million in earnings before taxes, will bag $430 million in cash when the deal closes in the next 60 to 90 days, Crouthers said.

Parallel has also received commitments from a group of investors led by Ceres for a $225 million private investment in a public equity – called PIPEs -- transaction when the deal closes.

The PIPE investment was over-subscribed, and attracted more than a dozen investments from athletes and celebrities, Crouthers said in the interview Tuesday.

The company, which also named record industry executive Scott "Scooter" Braun as a special adviser, said it currently has license applications pending in Georgia, New Jersey and Virginia. Braun, who is a co-founder of Ceres, is the talent manager for artists Justin Bieber, Ariana Grande and Kayne West.

Beau Wrigley Jr. who previously led his family's chewing gum business before selling it in 2008 for $23 billion, is Parallel's chairman and CEO.

Sturges Karban, chief executive officer of Irvine-based ManifestSeven Holdings Corp., noted that the Parallel deal is further confirmation of what looks to be an emerging trend of big deals getting done with cannabis-related SPACs – all being traded on Canadian exchanges.

U.S. firms that grow or sell cannabis cannot list their shares on the major U.S. stock exchanges as marijuana remains illegal at the federal level.

He pointed to completion of last month's deal by Jay-Z backed Californian pot producer TPCO Holding Corp. also known as The Parent Company, which is expected to generate $334 million in revenue in 2021.

"It [The Parent Company] kind of lit the fuse on what everybody expects to be a catalyst in California," Karban observed. "It's been inevitable that in a state this big and fragmented, that it would consolidate."

Like Jay-Z's company, Ceres Acquisition Corp. also trades on the Aequitas NEO Exchange Inc., or NEO. ManifestSeven, MedMen and cannabis review site Weedmaps — all based in Irvine — trade on the rival Canadian Stock Exchange, in Vancouver.

Editor's note: This story has been updated to properly reflect the artists Braun represents and clarify Parallel's expansion plan.

🍵☕️Top 6 Coffee Alternatives for Enhanced Productivity

In the fast-paced world of startups and venture capital in Los Angeles, maintaining peak productivity is essential for founders and investors alike. As the hustle intensifies, many are seeking alternatives to traditional coffee that not only provide a sustained energy boost but also support overall health and well-being. The following list highlights some of the top-rated coffee alternatives that can enhance focus and productivity while minimizing the adverse effects of caffeine. These options incorporate adaptogens, superfoods, and gut-friendly ingredients, making them ideal choices for those looking to optimize their performance without the afternoon crash.


Matcha

Image Source: Jade Leaf Matcha

Matcha is a finely ground green tea that offers a moderate amount of caffeine, along with L-theanine, which promotes relaxation without drowsiness. This combination can enhance focus and concentration, making matcha a suitable alternative for those looking to boost productivity without the jitters of coffee.

Popular Brands: ReNude Chaga Matcha (60 mg caffeine), Golde Pure Matcha (60 mg caffeine), Organic Ceremonial Matcha - Teahouse Edition (30 mg caffeine)


Dandelion Root Coffee

Image Source: Amazon

Dandelion root coffee is a caffeine-free alternative that mimics the taste of coffee. It is known for its potential to support liver health and digestion, which can contribute to overall well-being and productivity. The drink can help avoid the acidity and jitters that often accompany regular coffee, making it a gentler option for those sensitive to caffeine.

Popular Brands: Dandy Blend (0 mg caffeine), Teeccino Dandelion Dark Roast (0 mg caffeine)


Adaptogenic Drinks

Image Source: MUD\WTR Masala Chai

Adaptogenic beverages, which include ingredients like ashwagandha, reishi, and maca, are designed to help the body adapt to stress and promote mental clarity. These drinks can provide a sustained energy boost without the crash, supporting productivity throughout the day. They are often made with superfoods and spices that enhance both physical and mental performance.

Popular Brands: MUD\WTR Masala Chai (35 mg caffeine), Four Sigmatic Think Coffee (150 mg caffeine), ReNude Chagaccino (0 mg caffeine)


Golden Milk (Turmeric Latte)

Image Source: Golde

Golden milk, made from turmeric, ginger, and milk (or a milk alternative), is a caffeine-free option that can improve mood and reduce inflammation. The calming properties of this drink can help maintain focus and clarity, making it a great addition to a productive morning routine.

Popular Brands: Golde Turmeric Latte Blend (0 mg caffeine), Blume Turmeric Blend (0 mg caffeine), Four Sigmatic Golden Latte Mix (0 mg caffeine)



Chicory Root Coffee

Image Source: Teeccino

Chicory root coffee is an excellent alternative that satisfies the desire for a warm beverage without caffeine. It is rich in inulin, a prebiotic fiber that aids in digestion and promotes gut health by supporting beneficial bacteria. Chicory coffee has a nutty, earthy flavor and can help control blood sugar levels, contributing to overall energy and productivity throughout the day.

Popular Brands: Anthony’s Instant Chicory Root (0 mg caffeine), Teeccino Chicory Coffee Alternative (0 mg caffeine)


Yerba Mate

Image Source: Guayaki Yerba Mate

Yerba mate is a traditional South American herbal tea made from the leaves of the Ilex paraguariensis plant. It contains about 40-80 mg of caffeine per serving, which is less than a standard cup of coffee but enough to provide a gentle energy boost. Yerba mate is rich in antioxidants, vitamins, and minerals, and users often report feeling energized without the jitters or crashes associated with coffee. It has a unique, slightly bitter flavor and can be enjoyed in various forms, including loose-leaf tea and pre-brewed options.

Popular Brands: Guayaki Yerba Mate (40-150 mg caffeine)


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LA’s Data Center Supply Crunch

🔦 Spotlight

Happy Friday Los Angeles!

The Los Angeles data center market is experiencing a significant supply crunch, ranking 12th in growth among top markets since 2020 with only 265 megawatts of colocation inventory (data centers where businesses rent space to store their computing hardware and servers). Despite this, demand is surging, driven by AI, cloud, and hyperscaler needs, with AI accounting for 20% of new data center demand nationally. This scarcity is creating a highly competitive environment, with vacancy rates at a record low 3% and asking rents rising 13-37% year-over-year. For Los Angeles, this presents both challenges and opportunities in the big picture. The city's strategic position as a global entertainment hub and its connectivity to international markets through subsea cables make it an attractive location for data centers. However, the limited inventory and rising costs could potentially hinder growth and innovation in the tech sector. To maintain its competitive edge, Los Angeles will need to address these constraints through new developments, such as GI Partners' 16 MW addition at One Wilshire, and by focusing on high-connectivity, high-power capacity submarkets. The city's tech community should prepare for a landscape of increased competition for quality data center space, higher costs, and the need for innovative solutions to meet growing demand, particularly in AI and cloud services. While Los Angeles faces a challenging data center supply crunch, its strategic advantages and ongoing developments offer a promising path forward.


🤝 Venture Deals

LA Companies

  • Daisy, a one-year-old startup that designs and installs smart home and office technology systems, raised a $7M Series B co-led by Goldcrest and Bungalow, with previous investors Bullish and Burst Capital also stepping up. The company has raised a total of $13.3 million. - learn more

LA Venture Funds


    ✨ Featured Event ✨

    LA TECH CEO SUMMIT

    LA’s tech leadership is set to reunite after a long break! This two day summit will focus on building strong connections, sharing insights, and fortifying the local tech community.

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    🌐Decentralizing Data & Vacations: Sony's Web3 Leap and Sensible Weather's KOA Partnership

    🔦 Spotlight

    Happy Long Weekend Los Angeles!

    Sony Group is making a significant push into the blockchain and Web3 space, leveraging its Sony Pictures and Sony Music divisions along with a new global incubator. The company has developed the Soneium blockchain through Sony Block Solutions Labs, a joint venture aimed at accelerating Web3 innovation. Sony is launching the "Soneium Minato" public testnet and a developer incubation program called "Soneium Spark" to foster ecosystem growth and adoption. The initiative includes strategic partnerships with Web3 companies such as Astar Network, Circle, and Optimism. Sony aims to create a fan community centered on creators and connect diverse values through Soneium, with the ultimate goal of integrating Web3 services into people's daily lives. While the company acknowledges the challenges faced by Web3, including limited user adoption and the need for mainstream use cases, it remains committed to decentralizing the concentrated power of the current internet landscape.

    In completely unrelated and more digestible news Sensible Weather, a leading weather protection provider that we’ve featured many times, has partnered with Kampgrounds of America (KOA) to offer Weather Guarantees at over 450 KOA Campgrounds across the United States. This collaboration allows campers to purchase weather protection for their outdoor experiences, providing peace of mind and potential reimbursements of up to 100% of their nightly rate if weather conditions exceed predefined parameters. The partnership comes at an opportune time, as camping has seen a significant increase in popularity, with active campers growing by 68% over the past decade. If you are looking to do some camping this fall make sure you look into Sensible Weather protections to ensure that unpredictable weather won't dampen (nailed it) your camping experience.


    🤝 Venture Deals

    LA Companies

    • Space and Time, a blockchain data warehouse developer, raised a $20M Series A led by Framework Ventures. - learn more
    • Miris, a provider of spatial content streaming solutions, raised a $26M Seed Round led by IAG Capital Partners. - learn more

    LA Venture Funds

    • Fika Ventures led a $4.55M Seed Round for Revenew, a San Francisco startup that aims to help digital platforms and marketplaces manage their payments and optimize financial operations. - learn more
    • Bonfire Ventures participated in a $25M Series A for Supio, an AI platform for personal injury law firms. - learn more
    • Amplify LA participated in a $2M Seed Round for Pryzm, a startup that provides tools and data to help businesses navigate government contracting more efficiently. - learn more

      ✨ Featured Event ✨

      LA TECH CEO SUMMIT

      LA’s tech leadership is set to reunite after a long break! This two day summit will focus on building strong connections, sharing insights, and fortifying the local tech community.

      Learn More Here

      Register Here


      Download the dot.LA App

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