Silver Spike Acquisition (SSPKU) raised $250 million this past week, the year's third blank check company targeting the cannabis industry. The SPAC is led by Scott Gordon, Chairman of cannabis-focused investment firm Egg Rock Holdings and a former portfolio manager at Taconic Capital.
Silver Spike follows two other 2019 blank checks, Tuscan Holdings Corp (THCBU) and Tuscan Holdings Corp II (THCAU), which earlier this year raised $240 million and $150 million, respectively. Stephen Vogel, a blank check veteran, serves as Chairman and CEO of both companies. In 2018, one cannabis SPAC went public: MTech Acquisition raised $50 million, and earlier this year acquired a cannabis compliance platform and changed its name to Akerna (KERN).
The cannabis industry is a ripe target for SPACs. Following Canada's legalization of recreational use last year, and legalization in a number of states in the US, many entrepreneurs forming marijuana start-ups. Yet, American banks have been reluctant to lend to cannabis companies due to US regulations. SPACs offer an alternative means of financing.
