While many SPACs have been targeting industries producing little to no revenue – like flying taxis – and causing rampant speculation, I’m looking at a sector that brought in roughly $20B in revenue in 2020 and is set to grow double digits every year for the next decade.
This is because cannabis legalization is spreading across the globe, including the monumental announcement that New York will become the second-largest market to legalize recreational marijuana. Bloomberg estimates that New York sales could generate roughly $4B, a deal that could push the entire cannabis industry into hypergrowth.
Given that the SPAC market has cooled off quite a bit for pre-deal SPACs and with many trading near trust value, this is the spark that could push significant interest towards cannabis SPAC deals.
We know that the market is interested in cannabis.
It’s a SPAC that merged with Weedmaps and is currently trading up over 80%. While this SPAC may continue to run, we are also keeping our eyes open on pre-deal cannabis SPACs.
One such SPAC I am looking at is the second deal from the same management with Silver Spike Acquisitions Corp II (NASDAQ: SPKBU).
As with the original, the management team and board of directors have the experience and knowledge to find the right target. Its CEO Scott Gordon served in high-level positions at JP Morgan, Bank of America, and several hedge funds, and Director Dr. Orrin Devisnky is one of the top experts in medicinal cannabis and Director of the NYU Langone Comprehensive Epilepsy Center.
He also serves as the chair of the Medical Advisory Board at Tilray Inc. (NASDAQ: TLRY), a pharmaceutical and cannabis company.
With a total trust value of $250m and trading right near that value, the downside risk is limited.
If the deal is one that you are not interested in, you can still go ahead and return your shares for the share NAV of $10.
Of course, my colleague Don Yocham at the National Institute for Cannabis Investors (NICI) has been sharing profitable cannabis SPAC opportunities with his members since last April.
Some of which have already shown double-digit returns.
Don lets you know when to invest, what he thinks of the deals the SPACs are making, and whether the SPACs are worth selling for short-term gains or holding onto for bigger long-term returns.
He recently sat down with several members of the NICI Advisory Board, grabbed a camera crew, and recorded a video dossier to show you just how big this opportunity really is.
You’re free to learn more right here.