Parallel Cannabis Fell Victim To The Cannabis Market Taking A Downturn and The SPAC Market Blowing Up

During the last two years, businesses that completed go-public transactions by forming a special purpose acquisition company (SPAC) have come under considerable pressure and the mania associated with the trend has evaporated. 

Almost every sector has felt the after-effects of the SPAC mania and we are not surprised to see the cannabis industry get swept up in the trend. Last year, William “Beau” Wrigley Jr. almost completed a $1.9 billion transaction to go public through a SPAC which was backed by Scooter Braun, who is considered to be some form of a music icon.

Although Beau’s multi-state operator (MSO), Parallel, had a promising future, the deal fell apart several months later and no explanation was provided. After the fallout, Beau stepped down as Chief Executive Officer (CEO) and now faces a lawsuit from a few investor groups for securities fraud, mismanagement, and misrepresentation.

Based on publicly available data, the investors believe that Beau torpedoed the merger with Braun’s company, Ceres Acquisition Corp., and used the investment to service debt instead of being used to execute on the growth strategy that was presented to them.

During the last two years, the cannabis sector evolved from a sector with beautiful blue-sky growth potential to a graveyard of bankrupt, defunct, and non-viable businesses. Over the course of this period, several high-profile North American cannabis companies have gone under and we expect this trend to continue.

Even with our doom and gloom perspective, we believe there are several diamonds in the rough of the cannabis sector. Once the current cycle is over, we expect there to be clear leaders in the cannabis sector and will monitor how the industry advances ahead of midterm elections in the United States (US). 

If you are interested in learning about cannabis companies that are positioned to survive the recent selloff, please send an email to support@technical420.com with the subject “Leading North American Cannabis Companies” to be added to our distribution list. 

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Michael Berger is Managing Partner of StoneBridge Partners LLC. SBP continues to drive market awareness for leading firms in the cannabis industry throughout the U.S. and abroad.

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