Despite limited capital markets activity in the cannabis industry of late, two Special Acquisition Companies (SPACs) recently closed successful, nine-figure initial public offerings (IPOs).
On Nov. 5, Merida Merger Corp. (Nasdaq: MCMJU) announced the pricing of its IPO of 12 million units, at a price of $10 per unit. Merida’s units were composed of one share of common stock and one-half of one warrant which entitles the holder to purchase one share of common stock at a price of $11.50 per share. Merida also cross-listed its units on the Neo Exchange, Inc. in Canada.
Just two days later, on November 7, 2019, Merida closed its fully-sold IPO, which generated gross proceeds of $120 million.
On the same date, Stable Road Acquisition Corp. (Nasdaq: SRACU) announced the pricing of its IPO of 17.25 million units, at a price of $10 per unit. Stable Road’s units were also composed of one share of common stock and one-half of one warrant which entitles the holder to purchase one share of common stock at a price of $11.50 per share.
On November 13, Stable Road closed its fully-sold IPO, which generated gross proceeds of $172.5 million.
Merida and Stable Road join two other SPACs that have their securities listed on the Nasdaq Stock Market, Silver Spike Acquisition Corp. (Nasdaq: SSPKU) and Akerna Corp. (Nasdaq: KERN), which, before de-SPACing, was called MTech Acquisition Corp.
Despite a perceived malaise in public cannabis capital raises, all of Merida, Silver Spike and Stable Road all launched their offerings in 2019, and Akerna completed its life as a blank pool SPAC this year as well.
Perhaps these successful transactions signal a shift toward a U.S.-based capital raising strategy for certain cannabis industry concerns. It will be interesting to see what kinds of (likely cannabis-ancillary, as stated in each companies’ S-1 filing) businesses Merida, Silver Spike and Stable Road acquire as they follow Akerna’s lead and conduct their own de-SPACing transactions.
