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Someone dumped yesterday near the close... wonder why?
It’s still on my watchlist…they did cobble together several solid businesses so it’s worth monitoring albeit Auerbach went on his hype campaign to dupe spac buyers into over-paying for the assets that the early round investors were dumping for a tidy profit. At 5ish all hype is wrung out but now they have an uphill battle to actually prove themselves. Steve already proved he’s very successful at burning a lot of invested capital and now he has to prove they can build a dynamically efficient and scaled operation on top of an omnichannel approach which I’m starting to believe could be extraordinarily flawed, pressuring their margin profile considerably. So much to prove. All imo.
The Parent Company and Glass House Terminate $50 Million Strategic Investment
https://www.newcannabisventures.com/the-parent-company-and-glass-house-terminate-50-million-strategic-investment/
I told the CEO months ago. Get a real company name! But no!!!!!!!!!!
All the hype here sure disappeared
MotherShip Cannabis CO (MCC for short) I likey
CRLBF CURLF GRAMF GTBIF HRVSF JUSHF NXGWF PLNHF RWBYF TCNNF VRNOF
Parent Company to bring all the siblings underneath it's roof. I bought a position a few weeks ago at $6.38 already down 5% but thats the way the ball rolls sometimes. I really wanted to get into the Cali market which is huge and really fragmented. TPCO seemed like a good way to get in there. I'm more of a long term investor so going to hold onto this one and see how things work out.
CRLBF CURLF GRAMF GTBIF HRVSF JUSHF NXGWF PLNHF RWBYF TCNNF VRNOF
Analysts update??!!! Oh boy...just how high are these “analysts” who came up with these hysterical price projections... definitely good for a laugh though...
In one quarter the company went from $337.9M pro forma cash to 281M, a quarterly burn of $56.9M. After the $50M placement into GH they will have 231M and they still have big acquisition and expansion plans this year despite their chief M&A officer already leaving the company.
Even being generous and using adjusted sales of $46M, the current revenue run rate is actually lower than the 189M 2020 revenue number. The company withdrew their previously presented revenue guidance (a common bait and switch tactic currently being used by many spacs). I’ll have a listen to the cc but this company so far is living down to expectations. I had originally bought some warrants a couple months ago but sold them for flat so I’m just a curious onlooker for now. At a share price of 6.30 even with their fast decreasing cash balance the EV is near 400M yielding a reasonable EV revenue ratio. Worth following to see if they can pull this off. Last I checked MSOS had 5M shares and frankly that just does not speak highly of that portfolio manager. Anyone looking at the financials of Caliva and LCV would have known 2021 would be extraordinarily challenging. All imo
Adjusting for a full quarter of sales beginning January 1, 2021, Q1 2021 net sales would have been approximately $45.6 million
That was slightly above the analyst estimate.
TPCO Holding misses on revenue https://seekingalpha.com/news/3697427-tpco-holding-misses-on-revenue
... SUPER STATE OPERATOR ... $GRAM ...
$50 million strategic investment and 10-year biomass offtake and retail partnership agreements with Glass House Group, securing long-term access to greenhouse-grown cannabis and retail shelf space
Strategic investment made through Mercer Park Acquisition Corp’s private placement related to its merger with Glass House Group
Signs definitive agreement to acquire four acres of outdoor cultivation located in Sonoma County, CA from Mosaic.Ag, an affiliate of Soma Rosa Farms
Agreements set to provide The Parent Company unprecedented scale and margin advantage for the next decade.
What a disappointment this has been. How come no insider buying?
... WE THE BEST ... $GRAM #LootWallStreet
AMERICAN GREETINGS ANNOUNCES FIRST OF ITS KIND PARTNERSHIP WITH PREEMINENT ENTERTAINMENT COMPANY ROC NATION
Roc Nation and its Iconic Artists Team with American Greetings to Create Customized Digital Greetings and Physical Greeting Cards.
(Cleveland, OH — May 10, 2021) — Today, American Greetings announces a multi-year, multi-artist partnership with Roc Nation that includes digital and physical products developed in collaboration with the authentic voices of legendary artists as well as the Roc Nation brand. The initial products will extend the company’s line of Celebrity SmashUps; highly personalized smile-inducing, shareable videos that entertain, surprise, and delight audiences of all ages. American Greetings and Roc Nation also plan to launch physical and virtual paper cards.
“We are thrilled to work with American Greetings on a never before seen partnership with a renowned entertainment company, that allows Roc Nation and its talent to create a deeper bond with their audience,” said Brett Yormark, President of Business Operations & Strategy for Roc Nation.
“We build relationships with leading global companies, and we’re thrilled to add American Greetings as our greeting card licensee,” said Tom Caravella, Managing Director for Roc Nation United, a strategic licensing alliance between Roc Nation and United Entertainment Group. “ Roc Nation United is focused on creating innovative ways for artists and athletes to connect with their fans, and this new relationship with American Greetings is a great opportunity to do so in a very special and entertaining way.”
This is Roc Nation’s first line of digital and physical greetings. The collection of digital products will be available worldwide and released during 2021 with more info to come on physical card availability. Additional announcements are forthcoming as to specific product lines and timing. Fans can register for product alerts at www.americangreetings.com/roc-nation.
“This partnership is an exciting and important part of our mission to inspire people to connect and help them make others feel special, whether that’s on a birthday or anytime they’re moved to share some happiness, laughter and love.” said Rob Matousek, Executive Director – Direct to Consumer Business at American Greetings. “This announcement and the opportunity to collaborate with Roc Nation and their incredible artists is also a reflection of our commitment to creating authentic content that is relevant and accessible to everyone.”
SmashUps are available on www.americangreetings.com, www.bluemountain.com, and on the SmashUps apps available for iPhone https://apps.apple.com/us/app/smashups/id1441317717 and Android https://play.google.com/store/apps/details?id=com.smashups&hl=en_US
ABOUT AMERICAN GREETINGS:
As the leader in meaningful connections, American Greetings is committed to making the world a more thoughtful and caring place. Founded in 1906, the creator and manufacturer of innovative social expression products offers paper cards, digital greetings, gift wrap, party goods and more to help consumers honor the people and moments in life that really matter. The Company’s major greeting card brands are American Greetings, Papyrus, Recycled Paper Greetings and Carlton Cards. The 113-year-old company is headquartered in Cleveland, Ohio, and its products can be found in retail outlets worldwide.
ABOUT ROC NATION:
Roc Nation, founded in 2008 by JAY-Z, has grown into the world’s preeminent entertainment company. Roc Nation works in every aspect of modern entertainment, with recording artists, producers, songwriters, and more. Roc Nation’s client list includes some of the world’s most recognizable names: from Rihanna and Megan Thee Stallion to Buju Banton and Snoh Aalegra. Roc Nation is a full-service organization, supporting a diverse roster of talent via artist management, music publishing, touring, production, strategic brand development, and beyond. Roc Nation Sports was founded in 2013, bringing the organization’s full-service touch to athletes across the NFL, NBA, MLB, and global soccer including Todd Gurley, Kyrie Irving, Skylar Diggins-Smith, Dominic Smith, Kevin De Bruyne and more.
ABOUT UNITED ENTERTAINMENT GROUP:
United Entertainment Group is a global entertainment, sports and lifestyle marketing agency and part of the DJE Holdings Network. UEG creates breakthrough marketing with the people, properties and platforms that shape culture, and is headquartered in New York with offices in Los Angeles, Chicago, Dallas, London, Hamburg and Tokyo. UEG was founded in 2007 and works with FORTUNE 500 companies, celebrities, athletes and leading media properties. For more information visit www.uegworldwide.com.
... BANK ON JAY-Z ... $GRAMF
Item 5.02.
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On May 4, 2021, the Board of Directors (the “Board”) of Square, Inc. (the “Company”) increased the size of the Board from eleven to twelve directors and elected Shawn Carter to the Board as a Class II director, effective May 6, 2021. Mr. Carter is not expected to serve on any individual Board committees at this time.
Mr. Carter, age 51, known professionally as JAY-Z, is a musician, songwriter, record executive, producer, 22-time Grammy award-winner and entrepreneur. He has served as the co-founder and majority owner of Roc Nation LLC (“Roc Nation”) and founder of Marcy Media LLC, a full-service agency and entertainment company, since 2008 and co-founder and manager of Marcy Venture Partners, L.P., a venture capital and private equity firm, since March 2019. Since March 2015, he has been a founder, shareholder and artist of TIDAL, a global music and entertainment platform that brings artists and fans closer together through unique original content and exclusive events, which is currently majority owned by the Company (“TIDAL”). Since 2014, Mr. Carter has served as the co-founder, manager and board member of Ace of Spades Holdings, LLC, a luxury champagne company, and serves on the board of directors of a number of privately-held companies. Mr. Carter has also served as the Chief Visionary Officer of TPCO Holdings Corp. since November 2020, and previously the Chief Brand Strategist of Caliva, from July 2019 until its acquisition by TPCO Holdings Corp. in November 2020. Since 2003, Mr. Carter has served as the founder of the Shawn Carter Scholarship Foundation, a charitable organization focused on education. He also currently serves on the board of directors of REFORM, a philanthropic organization advocating for criminal justice reform.
Mr. Carter will receive the Company’s standard remuneration for non-employee directors in accordance with the Company’s Outside Director Compensation Policy, as described in the proxy statement relating to the Company’s 2021 annual meeting of stockholders. Mr. Carter has also executed the Company’s standard form of indemnification agreement.
There is no arrangement or understanding between Mr. Carter and any other persons pursuant to which Mr. Carter was selected as a director. The following are transactions required to be disclosed pursuant to Item 404(a) of Regulation S-K.
TIDAL Transaction Consideration. On April 30, 2021 (the “Closing Date”), the Company completed its previously announced acquisition of a majority stake in TIDAL pursuant to the Share Purchase Agreement (“SPA”), dated March 3, 2021, by and among Vandutch Acquisition Corp., a direct wholly-owned subsidiary of the Company (“Vandutch”), Project Panther, Ltd. (“Project Panther”), certain holders of equity interests in Project Panther listed in an exhibit to the SPA (the “Sellers”) and Mr. Carter, as Sellers’ Representative. Pursuant to the SPA, Vandutch purchased a majority interest in Project Panther in exchange for approximately $302 million, which amount is subject to customary adjustments and includes certain outstanding indebtedness of Project Panther and its subsidiaries, certain transaction expenses, and the aggregate amount of certain indemnification holdbacks established pursuant to the terms of the SPA, paid in shares of the Company’s Class A Common Stock, par value $0.0000001 per share (“Common Stock”) and cash (the “Transaction”). As part of the Transaction, Mr. Carter, directly and indirectly through entities affiliated with him, received approximately $63.4 million in the aggregate (the “S.C. Payment”), and a family member received approximately $450,000, in each case, in the form of cash and Common Stock within five business days of the Closing Date. The cash portion of the S.C. Payment includes repayment of outstanding indebtedness owed by Project Panther and its subsidiaries to such affiliated entities. Mr. Carter, the entities affiliated with him and the family member (collectively, the “Related Parties”) may also be entitled to receive additional amounts from certain indemnification holdbacks in the future in connection with the Transaction. Mr. Carter was also reimbursed $4.5 million in connection with certain insurance expenses related to the Transaction which he previously paid on behalf of Project Panther. Following the Transaction, the Related Parties continue to retain a minority interest in Project Rising, LLC, TIDAL’s new parent company and a direct subsidiary of Vandutch. In connection with the Transaction, the Company retains a call option to acquire this minority interest in the future.
Sublease. The Company has entered into a sublease agreement, dated as of April 30, 2021, with Roc Nation for approximately 15,875 square feet of office space in New York City at an annual base rate of approximately $1.5 million. The sublease commenced on the Closing Date and has a term of one year, with the Company having the option to extend the sublease for two additional six-month terms and the right to terminate the sublease upon thirty (30) days’ prior notice.
Marketing Agreement. The Company has entered into a marketing agreement, effective as of December 14, 2020, with an artist represented by Roc Nation pursuant to which the Company would collaborate with the artist on certain marketing campaigns. The marketing agreement has a term of one year. Roc Nation is paid a commission of approximately $200,000 pursuant to the terms of the marketing agreement.
... we love it ... $GRAM
Good stuff. I my mind, they are terrible at branding, marketing and image. Scattershot identity. No excuse. I called out the CEO.
"The Parent" with no name change = stupidity.
... TPCO Q1 RESULTS ... $GRAM
The Parent Company to Report First Quarter 2021 Financial Results on May 17, 2021
BY Business Wire
— 6:13 PM ET 04/26/2021
Impressive technical divergence has developed on the daily chart. Could be almost ready for an oversold bounce toward the 8.50 to 9.50 resistance points.
... JAY-Z POT STOCK CONFERENCES ... $GRAMF #PortfolioDay
SAN JOSE, Calif.--(BUSINESS WIRE)-- TPCO Holding Corp. ("The Parent Company") (NEO: GRAM.U, GRAM.WT.U) (OTCQX: GRAMF; OTC PINK: GRMWF), today announced that Steve Allan, Chief Executive Officer, will participate in the following upcoming conferences:
PI Financial Golden State Green: Going Deep into the California Cannabis Market Conference, being held on Wednesday, April 14, 2021. Management is scheduled to virtually present at 2:10 p.m. ET and participate in a roundtable discussion on California brands at 2:50 p.m. ET. To register for the event, SOURCE.
2021 Sequire Cannabis Conference, being held on Tuesday, April 20, 2021. Management will virtually present at 12:30 p.m. ET. To register for the event, SOURCE.
About The Parent Company:
The Parent Company (TPCO Holding Corp.) (NEO: GRAM.U, GRAM.WT.U) (OTCQX: GRAMF; OTC PINK: GRMWF) is California's leading vertically integrated cannabis company combining best-in-class operations with leading voices in popular culture and social impact. The Parent Company brings together global icon and entrepreneur Shawn "JAY-Z" Carter, entertainment powerhouse ROC NATION, California's leading direct-to-consumer platform CALIVA, and leading cannabis and hemp manufacturer, LEFT COAST VENTURES, to form a cannabis industry leader for the post-prohibition era. Chief Visionary Officer Shawn "JAY-Z" Carter, one of the most recognized and celebrated entrepreneurs of our time, will guide The Parent Company's brand strategy in partnership with Roc Nation, the world's preeminent entertainment company with a roster of culture-making artists, athletes and influencers. The brands we build together will pave a new path forward for a legacy rooted in equity, access, and justice.
I had a quick look at the business acquisition report posted on sedar. Obviously the 2020 financials are awful, specifically the LCV and Caliva opex and gross margins. I don’t see meaningful improvements on these until probably Q4 due to both business integration and expansion plans (not to mention additional acquisition integration), which will mean a huge 2021 cash burn as they expand these businesses. I’d expect close to 100M cash burn this year.
They bought Sisu for less than 1X 2020 sales which was relatively cheap. It is not hard to see where a significant portion of the projected 2021 revenue gains will come from. Sisu made 100M last year in distillate sales with paltry margins. Once all that product no longer flows through the wholesale market and instead is funneled only through owned brands, it will nicely feed the top line and the margin profile.
Is anyone familiar with LCV and their products? I look at their financials and I cannot believe they were bought for about 5X 2020 sales (if you include the earn out shares coming to them). Perhaps they have a lot of brand equity that merited paying such a premium? Most smaller scale acquisitions I’ve seen have been going for 2 - 3X sales, so frankly the close of LCV looks way overpriced. If they were bought mainly for their distribution then it just way overpriced since distribution is generally a far lower margin side of the business and would not merit a premium valuation.
Caliva, the granddaddy of them all was bought for 7X 2020 sales (including potential earn outs), which is high but not outrageous considering the name recognition and brand cache they’re offering along with distribution/marketing channel they’ve been building. However, 2020 revenue and gross margins are unimpressive and considering annual opex was slightly higher than annual revenues, they appear to still be in the prove out phase of this system.
Aside from the stock popping due to a media spot or headline making acquisition, I think it’s going to take until the end of the year to really see if management can actually achieve many of their projections from their presentation. I think any early margin improvements will be solely from Sisu as margin gains with the other operations will require both scale from expansion/build out and management continually driving efficiency along the entire supply chain, which may also require a shift away from any third party and agency brands (I’ve been invested in Lowell farms for over a year and part of their core strategy toward operational efficiency was to deemphasize or close out all third party brands and funnel primarily owned brands through their distribution platform to drive significant opex improvements). All imo
Shocked they are still riding the "Parent Company" name.
Zero sizzle.
Actually I would expect them to be called almost as soon as that VWAP is hit (quite faraway for now...) Steve even mentioned their ability to accelerate them on one of his recent interviews which says a lot to me, when a ceo is already accounting for that added cash availability. They want to mop up Cali and enter NY on top of amalgamating the three businesses from this spac. 330M doesn’t go that far.
At a current EV of 400M I think the commons are relatively cheap now. Seems like a lot of speculation got wrung out. Lots of investors have been pretty frustrated and sold in disgust as all the hype around this company didn’t pan out just yet. Admittedly this amalgamated behemoth has a lot to prove to right the ship but all capex is behind them and they’re cash rich, so if the markets see them clean up the opex in coming quarters there should be a speedy re-rating of shs.
The warrants offer much more leverage than commons for a lengthy swing trade, willing to hold for a few years if need be to see this play out. The warrants have been impressively resilient as the commons collapsed but there’s still a good possibility they test the 1.50 support area.
It’s says in prospectus it’s automatically exercised. 20 out of 30 days above 18. Something like that.
Yes, at $18, but it doubtful they would call them. You can't buy options on GRAMF so this is a great alternative if you're a long-term believer.
They can be called early though
Leverage! Warrants are good until 2026, just like buying a long-term Option/leaps. If this stock does anywhere close to AYR, well then just take a look at their warrants and what they trade for.
Why would you buy the warrants which are 11.50 strike price when stock is at 7ish. Just curious.
As I said this was a crude summation of all cash and all invested capital in the businesses (caliva, LCV and sisu). The shares dipped below 7 and while not tagging that 6.50 I was looking for, I decided to pick up some warrants on the recent weakness. I’d been eyeing them for several months. If warrants dip further toward 1.50 I’ll probably add more.
Interesting because these companies are trading at 3-4x that valuation. You also didn’t factor in the revenues of current operations.
Should have changed their name by now.
After seeing multiple posts and analysis floating around message boards using 92M shares outstanding, which directly conflicts with the transaction cap table from the corporate presentation, I reached out to IR for confirmation. Their response is as of the January 15 despac transaction date there are 98.9M shares outstanding. For having such a polished and frankly excellent website it smacks of pure laziness that they are still carrying pre transaction details, which are erroneous, in their current corporate presentation and I’ve let IR know that.
So, with this updated share count I’d peg 6.50 or so as a solid entry point for the stock.
Invested capital plus cash on hand is roughly 640M. A 640M market cap equates to about 6.50.
Doesn’t mean it hits that target or that it doesn’t go lower but that number is a solid current backstop justified by all invested capital in the businesses and current cash available to the business. How they operate going forward and how they spend that cash will of course be the big determining factors on just how solid a floor that area should be. All imo
What the hell is going on here. 10 was supposed to be a gift
I now expect the stock to trade toward the mid 5’s. Invested capital plus cash on hand yields about 650M and so that’s the market cap I’m thinking the stock gets to. Crude analysis and a bit random? Maybe. But I watched another despac do exactly that earlier this year, rising post despac and then falling and tagging that exact calculated level: cash plus invested capital. Just an opinion.
I guess my bragging came back to Haunt me!
Thanks John. The mirror is deep and wide for those of us willing to look. Best to you!
Sad, yes very sad. Oh, thank you, thank you.
Very unfortunate. So sad.
The sad fact is if another investor had pointed out my oversight in posting an incorrect share count on a stock board I would have thanked them for pointing out my misinformation and updated my valuation tool to account for the error. It’s a simple as that. Instead this back and forth has devolved into a truly sad display and testament of the very divisive times where individuals hide behind screens and allow any sense of humility, character and graciousness to wither away, calling people they do not know “rancid’.
I was happy to purchase some cheapies today in the $8.40's, and as well some warrants at the mid to low $2.20's. I was watching the action and wondering how much lower this stock would go from the above buy levels and then all of a sudden some huge buys jumped in and pushed the stock up fast!
Volume spiked and shares were trading as high as $9.30 before settling at close.
What does the board here make of this action? Any thoughts on possible upcoming trading patterns?
Good Luck to all!
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The Largest Vertically Integrated Omnichannel Cannabis Platform in California.
Newly formed vertically integrated cannabis company TPCO Holding Corp. (The Parent Company), will be the largest in California
Shawn “JAY-Z” Carter will join The Parent Company as Chief Visionary Officer to guide brand strategy and The Parent Company Social Equity Ventures, a corporate venture fund investing in Black-owned and minority-owned cannabis businesses
Entertainment powerhouse Roc Nation signs exclusive cannabis partnership with The Parent Company
$36.5mm in equity commitments from existing and new shareholders provides sufficient cash to satisfy closing conditions
Transaction expected to close in January 2021
Conference call and webcast available for replay
TORONTO--(BUSINESS WIRE)--Subversive Capital Acquisition Corp. (NEO: SVC.A.U, SVC.WT.U; OTCQX: SBVCF) ("SCAC"), a special purpose acquisition company (SPAC), today announced it has entered into definitive transaction agreements (the “Agreements”) with global icon, entrepreneur and MONOGRAM founder, Shawn “JAY-Z” Carter, entertainment powerhouse Roc Nation, CMG Partners Inc. (Caliva), California’s most trusted cannabis brand and leading direct-to-consumer platform, and Left Coast Ventures, Inc. (Left Coast Ventures), a predominant cannabis and hemp company with low-cost manufacturing and a diversified portfolio of brands, to form TPCO Holding Corp. (The Parent Company) (the “Transaction”). SCAC is the largest SPAC in both cannabis and Canadian history and will seek to redefine the industry with a mission to both consolidate the California cannabis market and create an impactful global company.
Subversive Capital Acquisition Corp., the Largest Cannabis SPAC in History, Announces Transaction with Shawn “JAY-Z” Carter, Roc Nation, Caliva and Left Coast Ventures to Form The Parent Company
Shawn “JAY-Z” Carter, who will become The Parent Company’s Chief Visionary Officer following closing of the Transaction, said: “Although we know we can’t fully redeem the injustices created by the ‘war on drugs’, we can help shape a brighter and inclusive future. The brands we build will pave a new path forward for a legacy rooted in equity, access, and justice. We’re creating something people can trust and we’re investing in our future, our people, and our communities.”
SCAC’s Chairman, Michael Auerbach, said: “California is the most powerful cannabis economy in the world, and we have a unique opportunity to consolidate the market with The Parent Company. With its advanced infrastructure, industry leading operational efficiencies, proven strategy of brands, and cultural influence, The Parent Company is expected to be best positioned for the inevitable end of cannabis prohibition in the United States.”
Steve Allan, who will become The Parent Company’s CEO following closing of the Transaction, said: “In addition to building the most influential portfolio of cannabis and hemp brands in the world, The Parent Company’s vertical operational platform has been designed for growth and future mergers and acquisitions, forging a path to redefine the cannabis industry in California.”
The Parent Company Investment Highlights
- Steve Allan as CEO
- Brett Cummings as CFO, President of Left Coast Ventures
- Dennis O’Malley as COO, President of Caliva
- Shawn “JAY-Z” Carter as Chief Visionary Officer
The Parent Company’s Board of Directors is expected to include:
- Michael Auerbach, Founder and Chairman of SCAC
Subversive Capital Acquisition Corp., a special-purpose company that’s growing in the cannabis business, said it acquired two California companies and named Shawn “Jay-Z” Carter as its chief visionary officer.
Subversive is buying Caliva, a cannabis brand with direct-to-consumer sales, and Left Coast Ventures Inc., a producer of cannabis and hemp products. The deals will create a new holding company and include US$36.5 million of equity commitments from new and existing shareholders.
The holding company, which will be called TPCO Holding Corp., expects revenue from the combined entities to be US$185 million in 2020 and US$334 million next year. The deals’ aim is to “both consolidate the California cannabis market and create an impactful global company.” The new company aims to reach 75 per cent of California consumers and Jay-Z will run its brand strategy and work on a related project to reform criminal justice.
The cannabis industry has seen a flurry of transactions as more U.S. states open up even though marijuana remains illegal on the federal level. With efforts to decriminalize it nationally, investors are trying to establish companies that can emerge as the cannabis equivalent of a Budweiser or a Coca-Cola.
Jay-Z, a top-selling rapper who has started his own music label, clothing line and chain of sports bars, may help the brands develop the necessary cachet. Subversive described his post as a newly created position that focuses on the company’s strategic agenda and leading growth initiatives. He previously launched his own line of cannabis with Caliva and served as its chief brand strategist.
“Although we know we can’t fully redeem the injustices created by the ‘war on drugs,’ we can help shape a brighter and inclusive future,” Jay-Z said in a statement. “The brands we build will pave a new path forward for a legacy rooted in equity, access, and justice.”
Drug laws, particularly for marijuana, have long been blamed for disproportionately incarcerating Black people. TPCO will seek to establish US$10 million in funding and dedicate 2 per cent of its annual net income to invest in cannabis businesses owned by Black people and other minorities and initiatives to promote justice reforms.
https://www.subversivecapital.com/
contact@subversivecapital.com
Transaction Terms and Conditions
Caliva Transaction
Pursuant to the terms of the definitive transaction agreement with respect to Caliva (the “Caliva Agreement”), SCAC will directly purchase each share of capital stock of Caliva owned by Canadian shareholders and, immediately thereafter, Caliva will merge with a newly-formed wholly-owned Delaware subsidiary of SCAC, with Caliva continuing as the surviving entity and becoming a wholly-owned subsidiary of SCAC (collectively, the “Caliva Transaction”). Under the terms of the Caliva Agreement, upon closing of the Caliva Transaction the Caliva shareholders will receive aggregate consideration of approximately $282.9 million (subject to certain adjustments and holdbacks).
Left Coast Ventures Transaction
Pursuant to the terms of the definitive transaction agreement with respect to Left Coast Ventures (the “LCV Agreement”), SCAC will acquire Left Coast Ventures by merging such entity with and into a newly-formed wholly-owned subsidiary of SCAC, with Left Coast Ventures continuing as the surviving entity and becoming a wholly-owned subsidiary of SCAC (the “LCV Transaction”). Under the terms of the LCV Agreement, upon closing of the LCV Transaction the Left Coast Ventures shareholders will receive aggregate consideration of approximately $142.2 million (subject to certain adjustments and holdbacks) less the Sisu Consideration (as defined below). Left Coast Venture shareholders will receive consideration in the form of newly issued SCAC Common Shares, subject to exceptions for certain U.S. persons that will receive consideration in cash. In connection with the consummation of the LCV Transaction, SCAC has also agreed to repay in full certain promissory notes of LCV for an aggregate amount equal to $15.0 million (the “LCV Note Repayment”) which LCV Note Repayment will adjust the consideration paid to Left Coast Ventures shareholders on closing.
In addition, the Left Coast Venture shareholders may receive up to approximately 3.9 million additional SCAC Common Shares in the event the VWAP of SCAC Common Shares reaches $13.00, $17.00 and $21.00 within three years of closing (with one-third of such shares delivered at each such price threshold).
Concurrently with the completion of the LCV Transaction, Left Coast Ventures will acquire Sisu Extraction, LLC (“Sisu”) pursuant to an agreement and plan of merger dated November 23, 2020 (the “Sisu Agreement”). Pursuant to the terms of the Sisu Agreement, the transaction will be structured as a merger of a newly-formed wholly-owned subsidiary of Left Coast Ventures with and into Sisu, with Sisu continuing as the surviving entity. Under the terms of the Sisu Agreement, upon closing of the Sisu Transaction the Sisu members will receive aggregate consideration of approximately $76.3 million of consideration (subject to certain adjustments and holdback, the “Sisu Consideration”). Sisu members will receive consideration in the form of $15.0 million in cash and the remainder in newly issued SCAC Common Shares, subject to exceptions for certain U.S. persons that will receive consideration in cash.
OG Enterprises Transaction
Pursuant to the terms of the definitive transaction agreement (the “OG Enterprises Agreement”) with respect to OG Enterprises Branding, Inc. (“OG Enterprises”), Caliva will acquire the remaining 50% interest in OG Enterprises, which is currently 50% owned by Caliva and 50% owned by an affiliate of Shawn “JAY-Z” Carter, by merging such entity with and into Caliva (the “OG Enterprises Transaction”), with Caliva continuing as the surviving entity. Under the terms of the OG Enterprises Agreement, upon closing of the OG Enterprises Transaction the affiliate of Mr. Carter will receive 5.0 million SCAC Common Shares and will have the contingent right to receive up to an additional 1.0 million SCAC Common Shares post-closing in the event the VWAP of SCAC Common Shares reaches $13.00, $17.00 and $21.00 within three years of closing (with one-third of such shares delivered at each such price threshold). The affiliate of Mr. Carter will enter into a lock-up agreement upon closing of the Transaction restricting sales of SCAC Common Shares for six months after the closing of the Transaction.
Roc Nation Transaction
Pursuant to the terms of the binding heads of terms agreement (the “Roc Agreement”) with respect to Roc Nation, LLC (“Roc Nation”), The Parent Company will become Roc Nation’s “Official Cannabis Partner”, Roc Nation will provide The Parent Company with special access and rights with respect to Roc Nation’s roster of artists and athletes and Roc Nation will promote The Parent Company’s brand portfolio and provide various services specifically described therein.
The Roc Agreement will be effective as of the consummation of SCAC’s qualifying transaction and will remain in effect for an initial period of three years, provided that The Parent Company and Roc Nation may elect to extend the term for an additional three years upon terms to be mutually agreed. Over the initial three year term, of the Roc Nation agreement, The Parent Company will pay to SC Branding, LLC the following consideration in SCAC Common Shares: (i) $25 million payable following commencement of the term; (ii) $7.5 million payable in respect of the second year of the term; and (iii) $7.5 million payable in respect of the third year of the term.
About Roc Nation
Roc Nation, founded in 2008 by JAY-Z, has grown into the world’s preeminent entertainment company. Roc Nation works in every aspect of modern entertainment, with recording artists, producers, songwriters, and more. Roc Nation’s client list includes some of the world’s most recognizable names in entertainment, from Rihanna and Rapsody to Buju Banton and Snoh Aalegra. Roc Nation is a full-service organization, supporting a diverse roster of talent via artist management, music publishing, touring, production, strategic brand development, and beyond. Roc Nation Sports was founded in 2013, bringing the organization’s full-service touch to athletes across the NFL, NBA, MLB, and global soccer. For further information, visit rocnation.com.
About Caliva
Caliva is a leading single-state cannabis operator in California. Founded in 2015, Caliva’s industry advantage comes from its vertical integration and direct-to-consumer platform. This direct-to-consumer experience enables customers to purchase cannabis at Caliva’s retail stores and place orders online for in-store pickup or same-day delivery straight to their door. Caliva’s plant-based solutions serve over 1 million customers and are designed to fit any lifestyle. Caliva’s commitment to compliance and quality reinforce its position as THE MOST TRUSTED NAME IN CANNABIS™. For more information visit caliva.com or follow along on Instagram, @GoCaliva.
About Left Coast Ventures
Headquartered in Santa Rosa, CA, Left Coast Ventures is a diversified cannabis and hemp company specializing in cultivation, extraction, manufacturing, brand development, and distribution. Left Coast Ventures and its subsidiaries are working to shape the future of the legal cannabis industry in the United States through acquisitions, investments, and incubation while building a respected portfolio of top shelf brands. Wholly owned, licensed, and/or distributed brands within the Left Coast Ventures portfolio include Marley Natural, Mind Your Head by Mickey Hart, Mirayo by Carlos Santana, JEF, SoulSpring, Provault, Chill, Headlight, Get Zen, New Frontier Brewing, and Yummi Karma/High Gorgeous.
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