Ceres Archives - Green Market Report

Debra BorchardtFebruary 22, 2021
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6min21250

Privately-held multi-state cannabis operator Parallel and special purpose acquisition corporation (SPAC) Ceres Acquisition Corp.  (OTCQX: CERAF) have entered into a definitive business combination agreement involving a transaction that, if completed, would result in Parallel becoming a public company. The investors have an over-subscribed private investment in public equity (PIPE) of $225 million. The deal is expected to close in Summer 2021.

The deal values Parallel at an implied enterprise value of $1.884 billion with expected net revenues of $447 million in 2021. The expected pro forma cash on hand of $430 million at the close, including the $225 million from the PIPE and $120 million of cash held in Ceres’ escrow account assuming no redemptions.

William “Beau” Wrigley Jr., Chairman and CEO of Parallel said, “This transaction will enable Parallel to accelerate existing investments to transform not only our company but also the cannabis industry, as we seek to disrupt the more traditional beverage alcohol and healthcare spaces. As a public company, we will have access to capital to grow our national footprint through new licenses and M&A, improve our cultivation and production capacity, expand our established retail footprint, develop and launch rare cannabinoids products with therapeutic benefits, and conduct important clinical research in partnership with the University of Pittsburgh Medical Center. We look forward to working with the Ceres team and benefiting from Scooter Braun’s expertise and extensive influencer network to reach our diverse consumers with creative omnichannel approaches that will fuel Parallel’s leadership in the cannabis industry.”

Formerly Surterra Wellness

In June of 2019,  Surterra Wellness closed on the initial $100 million Series D funding round and expanded its Board of Directors.  The company noted back then that the participants in the round included existing and new investors including former Patrón Spirits Company CEO, Ed Brown. At this time, Parallel is operating in five states that have the potential to see significant growth in cannabis sales, including FloridaPennsylvaniaMassachusettsTexas, and Nevada. It has a total of 42 brick-and-mortar dispensaries. Plus, an e-commerce infrastructure that supports the next phase of cannabis distribution, including online order-ahead, curbside pickup, and home delivery sales, which is expected to drive strong net revenue generation.

Ceres

The company said in a statement that the combined publicly listed company is expected to have Class A Subordinate Voting Stock and Class B Multiple Voting Stock. The Class B Multiple Voting Stock will have 15 votes per share and will be held by Beau Wrigley and his affiliate entities upon close. The Class A Subordinate Voting Stock will have one vote per share and will be the publicly traded class of stock upon the closing of the Transaction.

Scott “Scooter” Braun, Co-Founder of Ceres Group Holdings said, “I have carefully watched the cannabis industry and Parallel stands out as a leader in the space. With a culture of compliance and strong values, a commitment to social equity, and disciplined growth and innovation, I’m thrilled to work with Parallel. Together, Ceres and Parallel have the experience and reputation to drive growth and create value for all their stakeholders. Beau and his team stand out among the pack and bring to the table their deep experience and business acumen to run a public business of this size and I believe Parallel is primed for massive growth in the sector. I’m honored and excited for the opportunity.”

Joe Crouthers, Chairman and CEO of Ceres Acquisition Corp said, “Ceres’ deep cannabis and consumer experience, coupled with Scooter’s powerful network, makes Ceres an ideal partner for a well-positioned, well-led, high growth cannabis company like Parallel. The Ceres team has organized a set of truly unique resources that aims to open the top of the consumer awareness funnel and help fuel growth – from capital to cannabis to marketing to an extensive network in entertainment and access to consumers – we look forward to supporting Parallel’s transition to a publicly traded company.”


Debra BorchardtMarch 3, 2020
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Ceres Group Acquisition Sponsor and Ceres Acquisition Corp. closed on its initial public offering (IPO) of $120 million of Class A restricted voting units of Ceres. Ceres is a newly organized special purpose acquisition corporation (SPAC) incorporated under the laws of the Province of British Columbia for the purpose of acquiring one or more businesses or assets. The focus will be on cannabis companies, but it is not limited to that specific industry or any geographic location.

The shares will begin trading today on the Neo Exchange Inc. under the symbol “CERE.UN”, and are intended to separate into Class A Restricted Voting Shares and Warrants in 40 days (or, if such date is not an Exchange trading day, the next Exchange trading day), which will trade under the symbols “CERE.U” and “CERE.WT”, respectively.

Joe Crouthers, Chairman, Chief Executive Officer and Director at Ceres said, “Ceres Acquisition Corp. is excited to be partnering with fellow innovators at the NEO Exchange.  We will benefit greatly from their extensive experience and prior success as a senior exchange supporting SPACs and US-focused cannabis listings.  They’ve allowed us to target the most vital segments of an industry that is at a critical inflection point.  This forward-thinking approach sets the stage for companies and industries to flourish.”

Ceres’ board of directors is comprised of Joe Crouthers (Chairman), Jordan Cohen, Dr. Ervin Braun, Brian Goldberg, Jordan Toplitzky and Tahira Rehmatullah, and its management team is comprised of Joe Crouthers (Chief Executive Officer), Jordan Cohen (President, Chief Financial Officer, and Corporate Secretary) and Michael Vukmanovich (Chief Operating Officer).

Ceres said its strategy is to leverage its directors’ and officers’ and the Sponsor’s executive leadership and entrepreneurial expertise, strong marketing and brand capabilities, and investment experience and network in order to identify and execute attractive qualifying deals. Ceres’ management team and directors will undertake to identify potential investment targets, and use their relationships with strategic growth advisors and strategic marketing partners to continue to build relationships with company owners, executives, stakeholders, industry experts and financial intermediaries to uncover attractive acquisition opportunities.

Ceres has granted Canaccord Genuity Corp., the underwriter of the Offering, a 30-day non-transferable over-allotment option following the Closing to purchase up to an additional 1,800,000 Class A Restricted Voting Units, at a price of $10.00 each. The proceeds from the distribution of the Class A Restricted Voting Units (along with the proceeds from any exercise of the Over-Allotment Option) will be deposited into an escrow account and will only be released upon certain prescribed conditions, as further described in the final prospectus dated February 25, 2020.


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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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