One Cannabis to Go Public via Merger With Cannabis One
Unity Rd is the new name for America's first cannabis franchise, as parent company One Cannabis bills it, unveiled at the MJBizCon show in Las Vegas today.
One Cannabis, the parent of marijuana franchise Unity Rd, is going public via a “merger of equals” with Cannabis One Holdings Inc. (CBEI), a stock trading for 16 cents a share on the Canadian Securities Exchange. Structured as an exchange of shares for the similarly sized companies, each with about $17 million in revenue, the deal is expected to close in the first quarter of 2020.
The two Denver-based firms met under contentious circumstances, said One Cannabis CEO Christian Hageseth at the MJBizCon show today in Las Vegas. Cannabis One sent a cease-and-desist letter to One Cannabis, which I will heretofore refer to as Unity Rd to minimize confusion.
Mike Weinberger, an attorney and COO of Unity Rd, decided to go for a visit to maintain that his firm was the first to use the trademark. The companies struck up a friendship that led to the merger.
Unity Rd CFO Frank Knuettel told Franchise Times today he believes cannabis is a sector in which “being public is better. I come from the tech world, where the VC pool is so big,” but most venture capital and private equity firms have institutional investors that cannot invest in cannabis because it’s illegal at the federal level.
So far investors in Unity Rd have been high net worth individuals and family offices, along with management; being public will open it up to more shareholders, he said.
Knuettel co-founded a semiconductor company in the early 2000s that supplied parts for the backbone of the internet. “I’ve seen this exact playbook before,” he said, meaning explosive growth, wild valuations, a bubble burst and finally a cadre of excellent companies that survived and thrived.
When I said it’s not the exact playbook, since cannabis companies are actually illegal in the U.S., he responded. “We are waaaaaayyy too far along for the federal government to unravel it.”
Unity Rd unveiled its new store design for its retail dispensaries at MJBizCon, billed as the largest show for the marijuana business in the world. Unity Rd calls itself America’s first cannabis franchise and has sold 16 units, although the process involves first gaining a license from a state and then going forward with a franchise. It costs $1 million to $2.5 million for a Unity Rd franchise.