Beau Wrigley takes pot producer Parallel public

BILLIONAIRE William “Beau” Wrigley, Jr. is taking cannabis producer Parallel public, in a merger due to complete this summer with Canadian-listed Ceres Acquisition Corp. that values the Atlanta, Georgiabased firm at $1.88 billion.

Parallel, the first firm Wrigley, Jr. has led since selling his family’s chewing gum business for $23 billion in 2008, will take on Ceres’ listing on the NEO exchange as expectations of an easing of US rules on the pot sector draws investment.

Shares of Ceres surged 19% to $12.50 as the deal comes at a time when officially-sanctioned sales of cannabis have surged to record levels during the COVID -19 pandemic.

The combined company expects to have $430 million cash when the deal closes, a spokeswoman for Parallel confirmed to Reuters.

With around 50 retail stores, cultivation and manufacturing sites in four US states, Parallel will use the money to expand into new markets. It sells finished products including gummies, vapes and balms, but not chewing gum.

The company, which also named record industry executive Scooter Braun as a special adviser, said it currently has license applications pending in Georgia, New Jersey and Virginia.

US firms that grow or sell cannabis cannot list their shares on the country’s major stock exchanges as marijuana remains illegal at the federal level.

Jay-Z backed Californian pot producer TPCO Holdings also went public on NEO, while cannabis review site Weedmaps’ parent struck a deal in December to list on Nasdaq.

Parallel’s spokeswoman said it has also received commitments from a group of investors for a $225 million private investment in a public equity (PIPE) transaction when the deal closes.

The PIPE investment was over-subscribed, with a large chunk of the raise set to come from existing Parallel and Ceres investors, the spokeswoman said.

Parallel is already profitable, and expects to be cash flow positive this year, the company said on a call following the merger announcement.

Besides decriminalization in the selling of weed products, Wrigley feels one of the most significant changes could be the loosening of constraints around banking.

US laws have prevented interstate movement of pot products and has deterred banks and other financial institutions. —