Blank-check firm Greenrose buys four companies to build U.S. cannabis network
15/03/2021 11:00
By Shariq Khan
March 15 (Reuters) - Blank-check company Greenrose
Acquisition Corp GNRS.O said it would buy four private
companies to build a cannabis cultivation, distribution and
retail network across seven U.S. states, betting on the nation's
pot industry opening up soon.
Dealmaking in the U.S. cannabis industry has surged in
recent months on expectations that President Joe Biden's
administration will relax federal prohibition and make it easier
for companies to operate similarly to rivals in the alcohol or
tobacco industries.
Greenrose will buy Shango Holdings Inc, Futureworks LLC,
Theraplant LLC and True Harvest LLC at an initial deal value of
$210 million and a maximum earnout of $110 million, it said on
Monday.
The combined company will have nine dispensaries and over
300,000 square feet of cultivation space, Greenrose said.
Greenrose said it expects to temporarily move from the
Nasdaq to over-the-counter trading because companies growing or
selling marijuana in the U.S. cannot list on major stock
exchanges.
The company also plans to list on Canada's NEO exchange
after the deal closes, though there is still a chance it may not
have to leave the Nasdaq, Greenrose Chief Executive Officer
Mickey Harley told Reuters.
"We felt that when we did our IPO back in February last year
that there would be a chance, that we would get regulatory
relief before we close our business combination," Harley said.
"I think there is still a chance that does still happen," he
added. "It's going to be a close call."
Greenrose also looked at deals with cannabis software
companies, President Paul Otto Wimer told Reuters, adding the
company eventually decided against it as valuations for such
businesses were too high, among other issues.
(Reporting by Shariq Khan in Bengaluru; Editing by Amy Caren
Daniel)
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