Cannabis companies continue to face restrictions on most national exchanges. Special-purpose acquisition companies (SPACs) help fill the funding void.
These types of deals are occurring more often as a less costly and more efficient go-public strategy.
Recall in November how Caliva and entrepreneur Shawn Carter (aka Jay-Z) inked the largest ever SPAC deal with Subversive Capital Acquisition Corp. (OTCQX: SBVCF). The SPAC would acquire Caliva and Left Coast Ventures for a respective $282.9 million and $142.2 million.
But SPACs must clear several hurdles in 2021 to remain a popular and effective investment alternative.
Related link: 3 Cannabis SPACs To Consider For 2021
SPAC Deals May Close In 'Just A Few Months'
The traditional initial public offering (IPO) process is expensive and time consuming. SPACS allow companies to go public without spending as much money or time on the process.
Also, capital scarcity is driving a reliance on the public market.
Cresco Labs Inc. (OTCQX: CRLBF) co-founder Joe Caltabiano says SPACs may provide the fastest path to a public transaction.
An uptick in sophisticated investors and the desire for companies to go public is also fueling the trend.
"That creates opportunities for sophisticated financial vehicles, such as SPACs to amalgamate various assets and …