Jesus Christ. I mean, what to say about this? “This is a nice place you got. We’ll take your paper, now give us the keys”:
Before I get too ahead of myself, the story here is that The Green Organic Dutchman ($TGOD) up and bought itself an extractor/manufacturer for $21MM in paper, and another $15MM in paper at the ready. The transaction itself is definitelyworth the read.
I watched a horror movie on Halloween – ‘Oculus’. It largely centres on killing hot twenty-somethings (like any respectable horror pic should) – and it’s a ‘is it real or not‘ kind of story. I honestly like it. I also know it’s fiction. This horror story isn’t.
There’s so much to unpack in that press release.
Not only is it a ‘hurry up’ deal (2 weeks until close), $TGOD’s Board Chair (Jeff ‘I have no clue why I am here please let me leave’ Scott) self selected, and three guys who got punted from the perimeter of a Constellation……take out an LP. Imagine the ‘beep beep‘ sound of a truck backing up, taking on a load of paper, and the driver given the keys to the Executive bathroom. I mean…. what to say?
Plant a lily on $TGOD’s existing shareholder’s bodies? Be thankful that Jeffrey Scott figured out the escape room? That interim CEO/CFO (that’s a new one) Sean Bovingdon of $TGOD probably has about the same amount of stroke now as when he held 2 ‘C’ titles? Holy Hannah.
This is the first reverse-takeout I’ve seen of an LP by a 26k ft2 processor who boasts not only of chasing tolling agreements from here (wow), but will also close on a raft of contract manufacturing agreements. And ‘paid’ to do it. Go team!
If there’s one thing that can be taken from this (that’s all there is really), is that desperation and opportunism always seem to find each other just before last call.
Even ignoring that $TGOD already has 80k ft2 of ‘manufacturing and processing’ capability – what in the fuck is a guy who headed up Canopy’s ‘Animal Health Division’ for 8 months going to do with his new dog?
TheCannalysts have seen some interesting deals before. And like yourself, we’re expecting to see some very odd stuff come up over the next year or so – as capital stressed Canadian outfits are now on a different clock than they’ve been before. February 2021 breathed life into several cadavers who should have been quietly put to rest.
File this underneath the ‘wow that’s fucked’ folder in the filing cabinet – and I’m sure we’ll have more deals to add to it than this. But seriously – this is a flag that few could’ve expected to have been planted.
Buckle up. If this is where Canadian mid-tier’s without dates to the prom are heading: it’s gonna get a whole lot uglier.
The preceding is the opinion of the author, and is in no way intended to be a recommendation to buy or sell any security or derivative. The author holds no position in any of the companies mentioned.
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