Parallel Archives - Green Market Report

Julie AitchesonMay 3, 2021
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Up until now, the cannabis market in Texas has been limited, to say the least. Its medical cannabis Compassionate Use Program has fewer enrolled patients and businesses than most other states, and their restrictions put them in the bottom 11 (out of 47 programs) for accessibility nationwide. But between a recent $25 million investment by one of the largest privately-held multi-state cannabis operators in the U.S. (Parallel) in a cannabis cultivation, production and retail facility in San Marco Texas, and breaking legislative gains including over a dozen pieces of cannabis-related legislation submitted for consideration in 2021, that is about to change.  

Parallel’s investment reflects the growing demand for medical cannabis products in Texas. This financial commitment expands Parallel’s ability to meet the growing demand for medical cannabis products in Texas. The company has planned a 63,000 square-foot facility that is expected to create hundreds of new jobs in the San Marcos region. The company also recently introduced its goodblend retail brand a retail brand of Parallel that just launched the first cannabis capsules for patients registered in the Texas Compassionate Use Program. These capsules are the fifth medical cannabis format option offered through the company’s Surterra Wellness branded product line, and the fourth first-to-market product innovation that it has launched in Texas in the last eight months. 

and the lower House chamber’s passing of H.B. 1535 on Thursday would help expand Texas’ marijuana program for those suffering from chronic conditions. Currently, the state’s cannabis program serves those suffering from grave diseases such as terminal cancer, intractable epilepsy, seizure disorders, and multiple sclerosis, but if the bill gets passed into law, those with chronic pain, non-terminal cancer, and PTSD would gain access as well.  The bill would also raise the THC cap from 0.5% to 5% and make it possible for those in the medical cannabis program to have access to higher doses. 

This followed the passage of H.B. 2539 in the legislature by just a day, which would lessen the penalty for possession of up to two ounces of marijuana concentrate to a misdemeanor. On Friday, the Texas legislature passed H.B. 441 which, if signed into law, would make possession of less than four ounces of marijuana a misdemeanor as well.

According to a recent University of Texas poll done in collaboration with The Texas Tribune, a large majority (60%) of Texans support the possession of cannabis for medical and recreational use, while only 13% of respondents believe it shouldn’t be legal for use of any kind. For the record, the latter describes the stance of Texas governor Greg Abbot when Texas legislators legalized the use of medical cannabis in 2015. Though he appears to have had a change of heart since then, the original laws were among the most restrictive in the country, resulting in a low number of business licenses awarded and a similarly low percentage of Texans to whom cannabis would be available. This is the original climate that Parallel’s watershed investment and proposed legislative measures are seeking to proactively improve, which many Texans hope will lead to greater access for those in need, criminal justice reform, and economic growth for the U.S.’s second-largest state. 


Debra BorchardtFebruary 22, 2021
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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.”


StaffJanuary 6, 2021
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Parallel (formerly known as Surterra Wellness) is one of the largest privately held, vertically integrated, multi-state cannabis companies in the world with a mission to pioneer well-being and improve the quality of life through cannabinoids.  Parallel owns and operates retail dispensaries in four medical and adult-use markets:  Surterra Wellness in Florida and Texas; New England Treatment Access (NETA) in Massachusetts, and The Apothecary Shoppe in Nevada.  The company has a diverse portfolio of high quality, proprietary and licensed consumer brands and products including Surterra Wellness, Coral Reefer, and Float.  Parallel operates approximately 50 retail stores nationwide, including cultivation and manufacturing sites across the four states.

Executive Spotlight: Stevens Sainte-Rose

1) What is your title?
Chief Human Resources Officer

2) How many years have you been with Parallel ?
I have been with Parallel since September 2019. Prior to joining Parallel, I served in senior leadership positions with global companies such as The Coca-Cola Company, Walgreens Boots Alliance and Dawn Foods.

3) Where did you study?
I received my B.A. in Industrial and Labor Relations from Cornell University, and I completed my M.S. in Organizational Dynamics from the University of Pennsylvania.

4) What is your most successful professional accomplishment before cannabis?
In addition to my current role, I am also the Founder and Principal at Chase the Experiences, an executive coaching practice with a focus on creating more successful executive-level transitions and driving better diversity and inclusion. I also have certifications in The Myers-Briggs Company, Certified Emotional Intelligence 2.0 and Certified Professional Executive Coach.

5) What is Parallel’s mission?
Parallel is one of the largest privately held, vertically integrated, multi-state cannabis companies in the world with a mission to pioneer well-being and improves the quality of life through cannabinoids. We follow rigorous operations and business practices to help ensure the quality, safety, consistency, and efficacy of our products and are building our business by following strong values and putting the well-being of our customers and employees first.

6) What has been your team’s most successful achievement to date?
At Parallel our goal is to be the employer of choice in the cannabis and retail industries where we attract, engage, develop and retain top talent at all levels of the organization. This best positions us as a retailer of choice for our customers and allows us to carry out our mission every day to improve their quality of life through cannabinoids.
To do this we focus on three things:

1) World class rewards and well-being benefits programs
2) Top notch professional and management development programs at all levels.
3) Strong culture of shared purpose and engagement.
In 2020, while we made progress against all three areas, we are very proud of our total rewards and well-being benefits programs. We have benchmarked our offerings against cannabis, retail, consumer product goods and healthcare industries. These are largely where we pull our talent. We are the market leader against cannabis and retail industries and very competitive against CPG and healthcare industries. Examples of our offers include:
● 401k with company discretionary match
● Tuition reimbursement
● Employee Relief Fund
● Suite of Life Assistance and mental health programs
● Product discount
● Pet insurance
In addition, all employees have shares of the company as we want all to be part of the company’s long term success. These examples along with very attractive healthcare, dental, and vision
coverage are incorporated within our benefits package. Our offerings are informed by us listening to our employees and surveying them to understand what’s most important to them as
well as benchmarking against other industry best practices. In 2021, we will look to accelerate our portfolio of offers in buckets 2 and 3 with a suite of professional and management development programs and cultural engagement programs to unite our team. Examples of what’s in development include:
● “Homegrown,” our internal management trainee program for hourly associates
● Diversity and cultural leadership programs (led by a Diversity Council with established
employee resource groups)
● Product expertise and certification programs
● “Parallel Cares” program which includes company support of each employee’s charity of
choice through a matching contribution
We will leverage our established monthly pulse engagement survey to verify our activities are
truly impacting and engaging our employees.

7) How did the team execute this achievement?
While our customers and patients are what we get up every morning to serve, the core of what makes this happen is our employees, especially our front-line hourly employees. Our offerings are informed by us listening to our employees and surveying them to understand what’s most important to them. Also, we consistently benchmark ourselves against other industries and best practices to help ensure we are leading the market. Lastly, this cannot happen without leadership support, engagement, and role modeling.

8) What is your team working on right now that is unique in the industry?
This year we really took a step back and took inventory of what type of benefits are most desired by our employees. Stemming from a survey we conducted, we decided to create new programs including pet insurance and tuition reimbursement given that the typical age range of our employees is 30-32 years old. We’re also extremely proud of two new initiatives available for our employees. Our Employee Relief Fund, which is designed to support associates who experience financial hardships and is funded by the generosity of both associates and their leaders. Grants to associates provide monetary assistance to cover expenses like transportation, food, utilities, and funeral expenses that stem from eligible events. This was a system in the works before COVID-19 but is increasingly dependent upon as the pandemic continues on. Secondly, our Better Together program offers a one-time award of Restricted Stock Units (RSUs) valued at 10% of annual base pay, allowing associates to benefit from the long-term growth of Parallel’s values. Both of these initiatives are quite unique not only for the cannabis industry but the American business industry at large.

9) What are your predictions for 2021 in your particular segment of the industry?
At Parallel we are taking the long-term view of our company, and as cannabis continues to become a fixture, we want to be the lead in offering the most competitive benefits. The cannabis industry continues to attract talent from many industries and will continue to do so – talent who is interested in joining the industry today, and may not have even considered it a couple of years ago. We want to be a leader in being the most competitive in how we provide benefits and rewards so we can attract, and importantly, retain the best talent, and help those entering the business or their first job develop professionally.

10) What are your team’s long term goals?
At Parallel our goal is to be the employer of choice in the cannabis and retail industries where we attract, engage, develop, and retain top talent at all levels of the organization. This best positions us as a retailer of choice for our customers and allows us to carry out our mission every day to improve their quality of life through cannabinoids.


William SumnerOctober 7, 2019
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It’s time for your Daily Hit of cannabis financial news for October 7, 2019.

On the Site

NBA Veteran Al Harrington’s Viola Closes on $16m Financing Round

NBA veteran Al Harrington’s Viola closed on a $16 million funding round led by Gotham Green Partners. This is the first institutional investment in the company. The company said that this latest round of funding will assist with the acquisition of a 34,500 sq. ft cultivation, processing and distribution facility in Adelanto, California as well as the completion of Viola’s 48,000 sq. ft facility in Detroit, Michigan. The funds will also enable Viola to continue to advance the growth of the company’s personnel with key new hires that will continue to establish Viola as a leader in the cannabis marketplace.

Surterra Wellness

Surterra Wellness today announced that it has changed its corporate name to Parallel effective today. In June, Private cannabis company 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.

The Power That Data Has On Brand

Knowledge is power and the more data you have the better choices you can make for your brands. Akerna has been gathering data through its MJ Platform and will demonstrate how this data can be used for success with your brand. This panel was taped at the green Market Summit on September 11 in Los Angeles.

In Other News

TerrAscend

TerrAscend Corp. (CSE: TER) (OTCQX: TRSSF) announced that Health Canada has approved the company’s plan to expand its facility in Mississauga, Ontario from from 17,800 sq. ft. to 51,800 sq. ft. The expansion will include additional cultivation capacity, a commercial kitchen, formulation rooms and increased primary and secondary packaging capacity. “Achieving this approval milestone is a crucial step in our plan to cultivate premium grade cannabis at scale for distribution to the EU and other international markets,” said Michael Nashat, CEO of TerrAscend.

Emerald Health Therapeutics

Emerald Health Therapeutics (TSXV: EMH) (OTCQX: EMHTF) announced that its subsidiary, Verdélite, has a received a license amendment from Health Canada for the complete growing and processing area in its 88,000 square foot indoor facility. This will allow the company to increase its production space from 4 to 21 highly-controlled-environment grow rooms and to a total of 16 processing rooms. “This new license amendment allows Verdélite to transition into its full commercial phase and positions Verdélite as a key growth contributor to Emerald’s financial results in 2020,” said Riaz Bandali, CEO of Emerald Health.


Debra BorchardtOctober 7, 2019
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Surterra Wellness today announced that it has changed its corporate name to Parallel effective today. In June, Private cannabis company 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.

Brown was once the President and CEO of The Patrón Spirits Company, until retiring last year after nearly 20 years at the company. Under his leadership, Patrón grew from 118,000 cases sold in 2001 to more than 4.1 million in 2016, and is currently the top-selling ultra-premium tequila in the world.  Brown’s plan to apply his expertise in the premier spirits business to Surterra’s strategic global brand building seems to be paying off.

“The introduction of our new parent company brand, under the name Parallel, reflects our transformational growth over the past year and our long-term vision. We need a corporate name that unites the diverse parts of our organization and all of our associates,” said William “Beau” Wrigley Jr, CEO and Chairman of Parallel. “We chose the name Parallel because we are improving the well-being of our consumers today through our proprietary, innovative brands while at the same time stepping into the future through robust innovation. We like the name because we see well-being along a spectrum of what quality of life means to different people at different points of their lives, and our brands cover the full range of what they need.”

Parallel also announced today the introduction of Goodblend, the company’s new global retail brand. This store brand will become a recognized source across multiple markets where consumers can find a consistent and trusted selection of the company’s cannabinoid brands. Goodblend will roll-out initially in Florida over the course of the next several months. Parallel has a house, or portfolio, of consumer brands. Each of these brands has its own instantly recognizable name, imagery, appeal, and unique and differentiated positioning. Our proprietary consumer brands include Surterra Wellness, Coral Reefer, Endless Summer and Float.

“The philosophy behind our collection of brands is that the consumer is at the heart of everything that we do. Because consumers have different needs states across the well-being continuum, each brand is distinct. Yet, all our brands focus on improving the lives of our consumers and reflect our uncompromising commitment to consistency, quality, safety and efficacy,” said Wrigley. “Goodblend will simply reinvent what retail can be. Goodblend stores will be welcoming and inclusive of all our consumers and will allow each of our distinct brands a chance to shine – having their own stage under one roof.”

Parallel’s integrated footprint includes 37 retail dispensaries across the United States, including 34 in Florida; almost one million total square feet of cultivation and manufacturing operations across the platform; R&D facilities in Massachusetts, Florida, Budapest, Hungary and Medellin, Colombia; and an exclusive partnership with global biotechnology company Intrexon to drive its science and technology-led innovation.


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