Mercer Park Sees $224 Million In Redemptions Ahead Of Qualifying Transaction
It appears that demand for the US cannabis sector, as well as SPAC’s, is waning. Mercer Park Brand Acquisition Corp (NEO: BRND.A.u), the SPAC that will be merging with the Glass House Group in California, last night extended the timeline to complete the transaction with Glass House.
While the reason for the extension was not indicated, within the release it was identified that a total of 22.4 million class A shares were redeemed in connection with the extension, amounting to roughly $224.1 million in redemptions from investors that no longer wish to hold the equity of the SPAC, and instead desire to just hold the warrant attached to the initial investment.
As a result, the company expects to have a total of US$266 million in aggregate of cash immediately prior to the closing of the Glass House transactions, which includes an $85 million private placement being conducted as part of the transaction. Upon closing, the company is expected to pay $119 million in cash as part of the closing of the transaction to acquire the southern California greenhouse.
Upon closing, Glass House expects to be one of the largest cannabis growers in the state, with cultivation space capable of reach up to 6 million square feet once fully built out, while the company intends to have a retail footprint of 21 locations by Q1 2022.
Mercer Park Brand Acquisition Corp last traded at $10.12 on the Neo.
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