Please ensure Javascript is enabled for purposes of website accessibility

This SPAC Is Buying 4 Companies to Build a Vertically Integrated Cannabis Network

By Rich Duprey - Mar 15, 2021 at 11:36AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The businesses are already in operation in seven states.

Special purpose acquisition company (SPAC) Greenrose Acquisition (GNRS -14.84%) is looking to create a vertically integrated marijuana business by buying four different companies and merging them into a cultivation, distribution, and retail network.

It plans to operate in seven states where the businesses currently have a presence as it bets the Biden administration will relax laws that currently criminalize marijuana possession and use at the federal level.

Jar of marijuana with $100 bills

Image source: Getty Images.

Greenrose says it will acquire Shango Holdings, Futureworks, Theraplant, and True Harvest for a total price of $210 million, consisting of $170 million in cash, $15 million in stock, and $25 million in debt. An additional $110 million could be paid in earnouts.

Shango is already a vertically integrated producer with cultivation and processing facilities in several states, as well as a number of dispensaries. It operates in Arizona, California, Michigan, Nevada, and Oregon.

The Health Center has similar operations in Colorado while Theraplant has a combined cultivation, processing, manufacturing, and packaging facility in Connecticut, where it is one of only four growers.

True Harvest operates in Arizona, where it has a 74,000-square-foot cultivation facility, the capacity of which it plans to double. It also operates a processing facility.

Greenrose Acquisition will be renamed Greenrose Holding prior to completing the deals, and its stock will transition from the NASDAQ exchange to the over-the-counter market because companies actively growing or selling marijuana are prohibited from listing on major U.S. stock exchanges. 

It also plans to list on Canada's NEO Exchange, which is gaining popularity among cannabis companies. As of the end of February, there were nine marijuana stocks listed on the exchange.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Greenrose Acquisition Corp. Stock Quote
Greenrose Acquisition Corp.
$1.55 (-14.84%) $0.27

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.