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,
Steve Hecht
Steve Hecht is a go-to trial lawyer for hedge funds, institutional investors, family offices, university endowments, venture funds and other investors interested in utilizing the legal process to create value for their own investors. Whether by activist litigation, fiduciary duty claims, or appraisal and other valuation strategies, Steve has extensive experience across the gamut of options for shareholders. He regularly tries cases in Delaware Chancery Court and around the country for clients seeking outsized returns. Steve is a partner of Rolnick Kramer Sadighi LLP.
Thoughts from ACG Panel on Cannabis M&A
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 Business Valuation: Growing Importance as Market Expands
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…
SPAC Activity Subject to Contractual Restrictive Covenant
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…
SPAC Sues PIPE Investors For Failing To Fund
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…
The Re-Rise of SPACs
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…
Let the SPARCs Fly
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…
SPAC Litigation: Newest Flavor of the Month or More than Meets the Eye?
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…
Regulators Keep Close Eye on SPAC Surge
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…
SEC’s Investor Advisory Committee to Address New SPAC Disclosure Requirements
Welcome to our blog’s new SPAC Corner, as we kick-off an ongoing series of posts dedicated to this bourgeoning field of investor litigation.
A natural starting point for our focus on SPACs is to highlight the upcoming September 9 meeting of the SEC’s Investor Advisory Committee (IAC), at which the IAC will be discussing two…