The market has recovered and moved on to new highs in 2019 but remains very volatile and cautious. Driving that performance has been the recovery in large cap names that have a relatively low risk profile. Big Tech has done well. And so Clarus has had to be nimble remaining active in tech spaces like pipeline risk abatement using machine-learning and supporting Major Depressive disorder clinics. But our major focus has remained on the cannabis space where we have been involved with companies expanding their footprint in the US market. Multi-state operators have captured the vision of investors as US states slowly roll out medical and then recreational use of cannabis. Brands and market positioning have become very important value drivers. And as always, we have also been active in supporting gold exploration companies as they expand resources and develop strategic significance.
Market Upheaval in Q4 Still Provided Specialized Access
Clarus capital markets activities continued in Q4 2018 even though markets were very volatile and unforgiving. Clarus remained active with transactions for gold mining exploration companies and cannabis related companies. In the cannabis space, considerable M&A activity has emerged on the Canadian front as the market sorts out those that can deliver quality product consistently. In addition, a highly specialized new Canadian marine technology company that focuses on underwater sensors for unmanned vehicles (drones) raised funds for its expansion while a US focused medical services company raised funds for its future expansion.
Emergence of World Leading Financial Market in the Cannabis Space
While cannabis companies predominantly focused on the Canadian market were the first to emerge in the financial market, we are now seeing US focused players accessing capital on Canadian markets. Liquor companies, beverage companies, tobacco and pharma companies have begun to think about how they can play in the cannabis space. Clarus remains deeply involved having brought two new companies public (totaling $102 million IPO values) and advised another on a $300 million M&A transaction.
And let’s not forget the gold mining market. Clarus raised funds for exploration related companies and played a major role in the annual Denver Gold forum hosting multiple events with a total of 12 companies and 15 money managers.
In total, some $523 million of value was raised or advised on.
What's Happening at Clarus...
While uncertainty continues to roil most segments of the market due to trade concerns, the passage of cannabis legislation in Canada removed the final legal uncertainty for this dynamic new industry. Capital market activity in the cannabis space was widespread in June and Clarus was once again one of the leaders raising or advising on $294 million in three transactions in June alone. We also continued to be active helping to raise $50 million for new and emerging businesses in modular construction and potentially the massive new LNG market; and $10 million for a new gold mining venture. Total capital raised was $354 million for the month. (6/29/2018)