News: Exclusive: From gum to gummies, Beau Wrigley takes pot producer Parallel public.
(Reuters) – Billionaire William “Beau” Wrigley Jr. is taking cannabis producer Parallel public to complete a merger this summer with Canada-listed Ceres Acquisition Corp, which holds the Atlanta, Georgia-based company at 1.88 billion Valued at US dollars.
In parallel, the first company to run Wrigley Jr. since selling his family’s chewing gum business for $ 23 billion in 2008 will take over Ceres’ listing on the NEO stock exchange in anticipation of US regulations easing attracts investment for the pot sector.
The combined company expects to close the deal with $ 430 million in cash, a spokeswoman for Parallel confirmed to Reuters.
With around 50 retail stores, cultivation and manufacturing sites In four US states, Parallel will use the money to expand into new markets. It sells finished products such as gums, vapes, and balms, but not gum.
U.S. companies that grow or sell cannabis cannot list their stocks on the country’s major stock exchanges because marijuana remains illegal at the federal level.
Jay-Z backed California pot producer TPCO Holdings and went public on NEO while cannabis was reviewed site Weedmaps’ parents closed a deal in December to list on the Nasdaq.
The Parallel spokeswoman said she has also received commitments from a group of investors for a private investment of $ 225 million in a public equity transaction (PIPE) when the deal closes.
As more U.S. states legalize cannabis, officially approved sales rose to record levels during the COVID-19 pandemic.
In addition to decriminalizing the sale of weed products, Wrigley believes that one of the most important changes could be to ease restrictions on banking.
“This will frankly make life easier for companies like us to navigate some of these areas, and in a much more cost-effective manner,” Wrigley, who will remain the chief executive officer of the combined company, told Reuters.
US laws have prevented the interstate movement of pot products and deterred banks and other financial institutions.
But dealmaking and fundraising in the industry remain hot as expectations rise that President Joe Biden’s administration will ease federal bans.
Graphic: Pot producers collect record money –
Joe Crouthers, managing director of Ceres, a Special Purpose Acquisition Vehicle (SPAC), said the cannabis market has a lot of positive momentum and there is still room for growth.
“You can see that not only are companies delivering, but governments are delivering on some of those talks and promises,” said Crouthers, who will join Parallel’s board of directors.
Scooter Braun, executive of the record industry, will act as special advisor to Parallel.
SPACs have become a popular way to go public because they can be completed faster than an IPO and provide more security about the funds a company will raise.
Reporting by Shariq Khan in Bengaluru; Arrangement by Bernard Orr and Alexander Smith
Original Source © Reuters