Rimon, Schiff Hardin Steer Cannabis SPAC’s $200M IPO
News Debbie A. Klis · November 30, 2021
Law360 (November 30, 2021, 3:50 PM EST) — Canna-Global Acquisition Corp., a special purpose acquisition company aiming to create a multinational cannabis operator, began trading Tuesday on the Nasdaq after raising $200 million in an initial public offering, with guidance by Rimon and underwriter’s counsel Schiff Hardin.
The blank-check company, which is targeting the cannabis industry and trading under the ticker “CNGLU,” priced its IPO at $10 per unit, selling 20 million units. Each unit includes one share of common stock and one whole warrant, which the unitholder can redeem for one share of common stock for $11.50, according to the announcement.
Canna-Global Acquisition seeks to combine with a growing business within the medicinal cannabis or cannabinoid industry that complies with federal and local laws and regulations. It said it won’t limit its search to a specific region, but did “expressly disclaim any intent to and will not consummate” a merger with a business in Hong Kong or China, according to a filing with the U.S. Securities & Exchange Commission.
“We seek to create a ‘best-in-class’ multinational cannabis operator, operating across key markets globally, from cultivation to production and processing, productization, and sales and distribution,” the California-based company said in its amended registration statement.
“We will also target businesses that service or operate adjacent, or ancillary, to the cannabis industry but which are not directly involved in the production, distribution or sale of cannabis,” the SPAC added.
The cannabis industry “forever changed” after California legalized medical marijuana in the 90s, Canna-Global Acquisition said in the filing.
Since then, the industry has grown, and “the science underlying these products has also evolved, namely that there are abundant health benefits from the use of substances derived from the cannabis plant according to countless published studies,” the SPAC said.
The company is led by CEO and director Gerald Combs, an investment professional who also serves as the CEO of CASH International Asset Management Ltd., a Hong Kong-headquartered asset management business. The SPAC’s chief financial officer is George Koi Ming Yap, who also runs the Sydney, Australia-based financial consulting firm KMYG Global.
Investment bank EF Hutton, a division of Benchmark Investments, serves as the IPO’s sole bookrunner, according to the announcement.
SPACs, also known as blank-check companies, are shell entities that raise money through IPOs with the intent to merge with a private company and take it public. They’ve grown increasingly popular in the last year and a half as a way to bring businesses into the public markets without going through a traditional IPO process. Congressional efforts to tighten regulations on the vehicles are also on the rise.
A representative for Canna-Global Acquisition Corp. did not immediately respond to a request for further comment.
Rimon PC is providing legal counsel to Canna-Global Acquisition, with a team that includes partners Debbie A. Klis and David Mittelman.
Schiff Hardin LLP is providing legal counsel to the underwriter, with a team that includes partners Ralph V. De Martino and Cavas Pavri.