SPAC Deal Aims to Create the Largest Pot Company in California
Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.
Dealmaking in the frenzied cannabis market continues to flourish with the latest megadeal announced Thursday. Investors aim to build a Coca-Cola or Hershey of marijuana, launching the first national pot brand in the United States.
Glass House Group, a vertically integrated California-based cannabis company, is being gobbled up by Mercer Park Brand Acquisition Corp., a Canadian SPAC —or Special Purpose Acquisition Company — for $576 million.
The combination will create the most expansive fully-integrated, publicly listed cannabis business in California, with plans to build a six million square foot greenhouse, the biggest in the state.
The deal comes after Century City-based Ceres Group Holdings announced a SPAC in February to take Atlanta-based cannabis producer Parallel public in a $1.88 billion transaction.
Related: What Is a SPAC?
Ceres has also been trying to close a separate deal to raise a $100 million fund to make other cannabis investments, especially those in Los Angeles.
The Ceres SPAC, like Mercer Park's, trades on Canadian exchanges because U.S. cannabis companies are still barred from listing their shares on major U.S. stock exchanges as marijuana is still illegal at the federal level.
But with President Biden taking over the White House, cannabis investors are optimistic he will ease restrictions, following the lead of many states.
Earlier this month, New York became the 15th state to legalize recreational marijuana.
The possibility of federal legalization as well as record amounts of blank check deals led to $600 million in capital raised for cannabis companies in the first quarter of 2021, the highest level since 2019, according to Viridian Capital Advisors.
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Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.
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