Parallel becomes public company through merger with Ceres

The CEO of the cannabis company parallel, William “Beau” Wrigley Jr., who made his fortune in the chewing gum market, is taking his company public through a merger that will complete this summer with the Canadian Ceres Acquisition Corp., which values ​​the Atlanta, Georgia-based company at $1,8 billion.

Parallel is the first company managed by Wrigley Jr. since the sale of his family's gum business for US$23 billion in 2008, and will take over the listing of Ceres on the Canadian stock exchange NEO. Ceres shares rose 19% to $12,50 as the deal comes as cannabis sales officially hit record levels during the COVID-19 pandemic.

The combined company expects to have $430 million in cash when the deal closes, confirmed a spokesperson for Parallel told Reuters.

With about 50 retail stores, growing and manufacturing facilities in four US states, Parallel will use the money to expand into new markets. The company sells finished products, including gummies, vapes and balms. The company, which has named music industry executive Scooter Braun as a special adviser, said it currently has several license applications pending in Georgia, New Jersey and Virginia.

US companies that grow or sell cannabis cannot list their shares on the country's major stock exchanges, as cannabis remains federally illegal in the US. Californian cannabis producer TPCO Holdings backed by Jay-Z, also went public on NEO, while the online sales and advertising giant Weedmaps closed a deal in December to list on Nasdaq.

Ceres CEO said that the cannabis market has a lot of positive momentum, and that there is still room for growth. “We're starting to see not just companies deliver, but governments deliver on some of these conversations and promises,” said Crouthers, who will serve on Parallel's board.

SPACs have become a popular route into the stock market as they can be completed faster than an IPO and provide greater certainty about the funds a company will raise.