Sports teams often prize the benefits of home-field advantage, but when it comes to valuing a cannabis multi-state operator, playing in your home court does not necessarily result in the highest valuation. As we have posted about before, different states take vastly different approaches to valuation litigation, resulting in the same MSO potentially having
Players in the cannabis space already understand that federal tax law as currently structured extracts a far greater tax bite from marijuana businesses than corresponding companies, as cannabis companies are prohibited from deducting their business expenses from gross income. Of course, with U.S. cannabis sales expected to grow by nearly 2.5x from 2018 to 2025,
The Association for Corporate Growth of Los Angeles hosted a panel on Trends & Transactions in Cannabis Middle Market M&A.
The panel addressed appropriate valuation methods for cannabis companies, with one speaker suggesting that a valuation based on a multiple of EBITDA alone would likely not be sufficient if that were the only method, given
Cannabis valuation issues will continue to grow in importance as the macro industry grows and as market participants continue to engage in transactions that refine the inputs for any valuation analysis.
This piece by Bloomberg BNA [sub] highlights the 34 states that have now legalized cannabis for medicinal use (along with the 19 states allowing
In a federal court ruling from earlier this year, Vogel v. Boris, the New York federal court refused to toss out a claim by an LLC member, Vogel, against his two other business partners, alleging that they violated a restrictive covenant in the LLC’s operating agreement prohibiting any member from forming a new SPAC
As reported here in Law360 [$$], Sustainable Opportunities Acquisition Corp. — a SPAC planning to mine the seafloor for metals to be used in electric vehicle batteries — has sued two potential investors for failing to fulfill their purported obligation to provide funding under a PIPE deal. The investors had signed subscription agreements committing them
In this timely academic piece by Maria Lucia Passador, “In Vogue Again: The Re-Rise of SPACs in the IPO Market,” the case is made that SPACs in the US will continue their growth in the capital markets and should “update and evolve for good” despite the recent increase in litigation and resultant increase in
As reported here in Bloomberg, after launching a record-size $4 billion SPAC last summer, Bill Ackman’s Pershing Square Tontine Holdings is unwinding and returning its invested funds back to shareholders.
In June, Pershing Square announced it was buying a 10% stake in Universal Music Group, surprising investors who had been expecting a classic SPAC
As Alison Frankel at Reuters observed, of the 60+ lawsuits filed in New York state court in the first half of this year against SPAC directors for inadequate disclosures, most of them typically settled after the initial complaint was filed, without advancing their claims that the SPAC boards violated their duty of disclosure by
Given the unprecedented surge in SPAC activity in the first half of 2021, SEC Acting Director John Coates has expressed concerned about risks ranging from fees, conflicts and sponsor compensation, to the sheer amount of capital pouring into the SPAC market. Naturally, with this surge has come “unprecedented scrutiny,” and the SEC has been focusing