Finding Opportunity in Crashed Cannabis SPACs

You’re reading a copy of this week’s edition of the New Cannabis Ventures weekly newsletter, which we have been publishing since October 2015. The newsletter includes unique insight to help our readers stay ahead of the curve as well as links to the week’s most important news.

Subscribe to receive our free weekly newsletter in your inbox each Sunday morning.


It’s been almost seven months since we weighed in on the topic of SPACs, suggesting that some were becoming interesting. The collapse since then has been huge, with many of the stocks we discussed plunging more than the 42.2% decline in the New Cannabis Ventures Global Cannabis Stock Index.

The average of these SPACs, which includes SHF Holdings, which was excluded from the prior article, is -62%, a much bigger decline than the market’s loss. One name has rallied, but the rest are down at least 54%. That name that has rallied is the only one above $1. One company, Akerna, is even exiting the cannabis space.

Today, we want to weigh in on a few of these given the large price declines. I don’t include two of the stocks we are discussing today on my Focus List of 27 stocks, but these three relatively new SPACs could be of interest.

SHF Holdings, which was initially known as Safe Harbor Financial, has collapsed. I shared an article with my subscribers at 420 Investor at the end of November, when the stock was trading near $4, that the limited analyst coverage and the poor chart at the time left me not wanting to add it to the Focus List. The company isn’t a bank. Rather, it facilitates access to banks for cannabis companies. It was spun out of Partner Colorado Credit Union, which holds $56.9 million of its debt now, though it’s not debt. It is a contractual payment, SHF Holdings had only $7 million cash at the end of Q3 and doesn’t generate much cash flow. This could be interesting if the debt situation is resolved.

The Parent Company is in a potential merger situation, and we have interviewed the CEO of the company they are potentially acquiring, Gold Flora, twice. This could be a great merger, but the company hasn’t yet provided a proxy or shared a slide deck so that investors can understand the financial situation of the combined companies. In our view, it’s been very poorly received so far, with the stock falling and volume very low. The stock trades at a very low multiple of its tangible book value.

WM Technology, which rallied big on Friday after their report but is still down in price year-to-date, is not only on my Focus List but also in my Beat the Global Cannabis Stock Index model portfolio. I think the stock could more than double this year based on my valuation analysis. There are gaps in the price chart to $1.825 from November and $3.38 in August, their last two quarterly reports before the recent Q4 report.

Busted SPACs have performed very poorly since we wrote that article near the end of August, and we think that there could be some opportunities in some of these stocks ahead.

Public Cannabis Company Revenue & Income Tracker

The Public Cannabis Company Revenue Tracker, managed by New Cannabis Ventures, ranks the top revenue and incoming producing cannabis stocks.

New Cannabis Ventures publishes curated articles as well as exclusive news. Here is some of the most interesting business content from this week:


Glass House Brands’ wholesale business saw a strong performance selling more in its third quarter than it did the previous year said Co-Founder, Chairman and CEO Kyle Kazan in an exclusive interview. On its retail side, the company has nine dispensaries and plans to open a 10th soon. Glass House also plans to expand its capacity by 80 percent by retrofitting another 1 million-square-foot greenhouse, with plans to have plants going in by the end of the year. While Kazan considers its balance sheet good, it’s not great. “Turning on more capacity will help the company get to the point where it can pay off the recently completed preferred offerings and address its debt”, he said.

Trulieve Cannabis Corp. got its start in a former tomato packing plant in Quincy, Florida, growing into a $1 billion company in 2022. It has built a national footprint across the U.S. using a regional hub strategy. In an exclusive interview, CEO Kim Rivers says that while the company remains bullish on its home state of Florida, it continues to grow in its hub markets. The company also recently entered Georgia, with the first phase of its cultivation and production footprint in the state, and it has plans for retail stores. Rivers anticipates opening the company’s operations in the Peach State this year.

Sales of cannabis in Michigan shot up 40% to $216 million from a year ago. Sales also rose 4.5% sequentially. While medical sales plummeted 61.5% from a year ago to $10 million, and were down 11.4% sequentially, adult-use sales expanded 60.1% year-over-year to $206.4 million, up 5.3% sequentially. So far this year, sales have grown 35.9% compared to the first two months of 2022.


Ascend Wellness Q4 revenue increased 1% sequentially and 26.7% year-over-year to $112.1 million. Full-year net revenue jumped 22.1% year-over-year to $405.9 million. In 2022, Ascend opened four dispensaries and two stores. It also transitioned three stores in New Jersey to adult-use. Ascend also entered the Pennsylvania market with the purchase of six dispensary and one cultivation license. “We made significant progress in scaling our business; we expanded our cultivation capacity by 40%, bringing the total to 245,000 square feet across six states; grew our number of open and operating dispensaries by 20%; successfully launched a value brand, Simply Herb, to excellent results; and pioneered the cannabis outlet retail model in the U.S.,” said Dan Neville, CFO and interim co-CEO.

Cresco Labs Q4 revenue fell 5% sequentially and 8% year-over-year to $200 million. “None of the challenges of 2022 change the long-term thesis and opportunity that is cannabis,” said Charles Bachtell, CEO and co-founder. Meantime, Cresco and Columbia Care mutually agreed to extend the outside date to complete their previously announced transaction to June 30, 2023.

Glass House Brands Q4 revenue was $32.2 million, up 14% sequentially. Revenue rose 75% year-over-year. The company recently announced plans to turn on an additional greenhouse at its SoCal Farm capable of producing 250,000 pounds of biomass annually once fully operational. The addition represents a more than 80% increase in production capability. “This farm puts us firmly in the pole position to be the leader not just in California, the Mecca of cannabis, but the entire U.S., enabling us to consistently produce top quality cannabis in a highly efficient, low cost and profitable manner,” said Co-Founder, Chairman and CEO Kyle Kazan.

GrowGeneration didn’t do much growing in 2022, with Q4 revenue falling 23% sequentially and 40% from the same quarter a year ago to $54.5 million. “We recognized early last year the need to shift our focus toward right sizing our cost structure, reducing inventory, consolidating our store footprint, and generating cash to strengthen our balance sheet. We made significant progress against these initiatives in 2022, and we firmly believe these decisions are putting GrowGen in a better place to be stronger and nimbler than ever before,” said Darren Lampert, co-founder and CEO.

High Tide Q1 revenue increased to $118.1 million, compared to $72.2 million during the same period in 2022, representing an increase of 64% year-over-year and 9% sequentially. “While some of our peers have flatlined in revenue or struggled with maintaining margins, our results indicate that our company has succeeded in managing our exponential growth and driving consistent margins,” said President and CEO Raj Grover. He added that previously announced plans to add 40 to 50 new stores in 2023 have been put on hold. Instead, the company plans to “be amongst the first Canadian cannabis companies to become free cash flow positive – while also continuing to grow in a stable and consistent way,” he said.

TerrAscend Q4 revenue was $69 million, up 4% sequentially and 50% year-over-year. For the full year, net revenue reached $247.8 million, an increase of 27.6% year-over-year. Revenue increased sequentially every quarter in 2022. “Q4 2022 also marked our second consecutive quarter of generating positive cashflow from operations. Looking ahead, we expect the distress in the industry to lead to opportunities for us to pivot our deep not wide strategy to a deep and wide strategy, on our terms,” said Executive Chairman Jason Wild.

TILT Holdings Q4 revenue rose 9% quarter-over-quarter to $44.3 million. Revenue was $174.2 million for the year ended Dec. 31, 2022, compared to $202.7 million in the prior year. The decrease in revenue was primarily driven by lower volumes and pricing in the company’s inhalation business, partially offset by continued growth in cannabis operations. “Our sector faced headwinds from the overall economic environment and, to a greater extent, the sector itself adapting to cannabis as a commodity more rapidly than expected. Our financial results were not immune to these patterns,” said CEO Gary Santo. Earlier this month TILT announced it had completed final actions relating to debt refinancing.

WM Technology Q4 revenue slipped 2% sequentially and 9% year-over-year to $49 million, while full-year revenue was $215.5 million, compared to $193.1 million in the prior year. The company issued guidance for the first quarter of 2023 with revenue estimated to be $47 million. Late last year, Doug Francis, co-founder and executive chair, took a more active role in leading the company. He succeeded Chris Beals, who stepped down. “Having returned in November to an operating role at Weedmaps, I have spent the past four months listening to our clients’ needs and working actively with our teams to build an achievable plan for 2023,” Francis said.

To get real-time updates download our free mobile app for Android or Apple devices, like our Facebook page, or follow Alan on Twitter. Share and discover industry news with like-minded people on the largest cannabis investor and entrepreneur group on LinkedIn.

Use the suite of professionally managed NCV Cannabis Stock Indices to monitor the performance of publicly-traded cannabis companies within the day or over longer time-frames. In addition to the comprehensive Global Cannabis Stock Index, we offer a family of indices to track Canadian licensed producers as well as the American Cannabis Operator Index and the Ancillary Cannabis Index.

View the Public Cannabis Company Revenue & Income Tracker, which ranks the top revenue producing cannabis stocks.

Stay on top of some of the most important communications from public companies by viewing upcoming cannabis investor earnings conference calls.

Discover upcoming new listings with the curated Cannabis Stock IPOs and New Issues Tracker.


Alan & Joel

Exclusive article by Alan Brochstein, CFA
Alan Brochstein, CFA
Based in Houston, Alan leverages his experience as founder of online community 420 Investor, the first and still largest due diligence platform focused on the publicly-traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. At New Cannabis Ventures, he is responsible for content development and strategic alliances. Before shifting his focus to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst following over two decades in research and portfolio management. A prolific writer, with over 650 articles published since 2007 at Seeking Alpha, where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source to the media, including the NY Times, the Wall Street Journal, Fox Business, and Bloomberg TV. Contact Alan: Twitter | Facebook | LinkedIn | Email

Get Our Sunday Newsletter