- Gage Cannabis recently closed on Regulation A equity financing offering, raising gross proceeds of $50 million
- Issuance was oversubscribed, resulted in addition of over 1,000 new investors to Gage Cannabis’ shareholder base
- Gage Cannabis plans to use the proceeds to further expand Gage’s retail reach, pursue M&A opportunities and help solidify the company’s position as one of the leading operators in the state of Michigan
- Company also announced appointment of Richard Mavrinac to Board of Directors
Gage Growth Corp. (d.b.a. Gage Cannabis) (“Gage Cannabis”), a leading vertically integrated cannabis operator currently focused exclusively on the Michigan market, recently announced that it had successfully concluded its Regulation A, Tier 2, equity financing offering. The equity issuance consisted of Gage Cannabis issuing 28,571,400 subordinate voting shares for total gross proceeds of $50 million, the maximum amount qualified under the company’s offering circular. The offering was oversubscribed by both institutional and retail investors and has led to a significant expansion of the company’s shareholder base through the addition of over 1,000 new investors (https://cnw.fm/WnV1P).
“We are humbled and excited by the significant interest and investor demand we received for our oversubscribed Reg A financing,” said Gage Cannabis President Fabian Monaco. “Michigan is one of the fastest growing cannabis markets in the United States, and Gage is well positioned with a robust balance sheet to continue to grow our market share as the leading operator with the best brands in the state. This is a great first step in our journey to becoming a publicly traded company, and we’re excited to continue to drive long-term shareholder value.”
Gage Cannabis has been one of the prime beneficiaries from Michigan’s move to legalize the use of recreational marijuana in December 2019. Since then, Gage Cannabis has pursued an aggressive expansion plan, which has seen the company open 6 medical or adult-use locations across the state, with a further 10+ locations slated to open in 2021.
The company’s rapidly expanding footprint has been largely predicated on the strong underlying sales growth witnessed within the sector. Cannabis retailers sold approximately $450 million worth of recreational marijuana products in the state of Michigan over the twelve months following the legalization decision on December 1, 2019, an achievement which was significantly boosted by the Michigan State Government’s decision to nominate the cannabis industry as an ‘essential sector’ during the COVID-19 outbreak (https://cnw.fm/udyk9). Remarkably, the sector’s sales have continued to thrive, rising to a run-rate of over $13 million a week in recent months (https://cnw.fm/9grXf). Should that rate be maintained, sales growth for the sector could rise by nearly 400 percent year-over-year to approximately $1.6 billion over the course of the next year.
“It really is just explosive growth in Michigan,” stated Sloane Barbour, the chief revenue officer of cannabis industry recruitment agency FlowerHire (https://cnw.fm/Nady8).
Gage Cannabis plans to use the proceeds from its recently closed Regulation A equity financing to further cement a dominant position within the Michigan state marijuana industry by expanding its retail footprint and pursuing accretive acquisitions which could assist in further expanding their market share. The company has also stated its intent to pursue a potential go-public transaction, which it expects to complete in the first quarter of 2021.
In addition to the equity issuance, Gage Cannabis also seized on the opportunity to update investors on a recent addition to the company’s Board of Directors. Richard Mavrinac, formerly the CFO of George Weston Limited and Executive Vice President of Loblaw Companies Limited, two of Canada’s largest companies operating in the retail grocery and bakery sectors, will be joining Gage Cannabis’ board to assist the company on its future growth strategy. Mr. Mavrinac is also a member of the Board of Directors of TerrAscend Corp., Roots Corporation and Canopy Rivers Inc., and will bring a significant wealth of experience within the retail and cannabis sector to Gage Cannabis executive team.
For more information, visit the company’s website at www.GageUSA.com.
NOTE TO INVESTORS: The latest news and updates relating to Gage Cannabis are available in the company’s newsroom at https://cnw.fm/GAGE
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