February 25 2023,

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THE BIG IDEA

Hi all,

Let’s get to it:

  • Why is TPCO doing this deal?
  • The Pinocchio of Pot

I hope you find it interesting,

Alex

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WHAT YOU MISSED IN WEEDWEEK CALIFORNIA PRO

2020
Photo by Sterling Davis on Unsplash

Why is TPCO merging with Gold Flora?

The Parent Company’s (TPCO’s) announcement this week of a “merger of equals” with privately-held Gold Flora has observers scratching their heads.

The all-stock deal would combine TPCO with the owner of well-regarded Airfield Supply shop in San Jose, as well as brands, manufacturing and cultivation businesses. The resulting vertically-integrated player would be among the largest in California. The press release argues the combined company would have the footprint and economies of scale necessary to compete in the state’s punishing market.

Colin Campbell, an LA-based managing director at M&A advisory Sharp Capital Advisors, a boutique M&A advisory, called the deal “encouraging in the sense that it recognizes the government isn’t going to step in with a “silver bullet” like federal banking reform. “It’s two companies trying to figure out, ‘How do we survive?”

Amid California’s punishing market, similar tie-ups have been widely expected. Morgan Paxhia, Managing Director of Poseidon Asset Managementwrote in Kiplinger this week that there’s a “natural need” for M&A.

So why is he, like several observers I spoke to, “mixed to negative” on the deal?

TPCO and Gold Flora declined to comment.

Read the story

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"THE PINOCCHIO OF POT"

Over at Forbes, Will Yakowicz dives into the legal saga at RAW Rolling Papers which has fascinated the cannabiz

At the beginning of the pandemic, Raw’s 52-year old founder and social media star Josh Kesselman, told Forbes about the company’s factory in Alcoy, Spain:

“Alcoy is insulated; we’re up in the mountains, not down where the Covid really is in Spain. We’re one of the few real businesses in Alcoy.”

There was, however, one very real problem with Kesselman’s factory in Alcoy– it doesn’t exist.

Read the whole thing

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