No, this isn’t a technical article about how to better grow marijuana, or a new hydro system. The cannabis industry is growing rapidly. With legalization in Canada taking full effect on October 15, 2018, and more marijuana legalization measures on ballots across the United States, the stigma on the industry is shrinking, and the industry is growing. A look at the stock prices for Tilray, Canopy, Aurora and others on the Canadian Stock Markets can tell you all you need to know these days about the growth and trajectory of the industry.
Mergers & Acquisitions
Of course, as the industry grows, larger players in the cannabis market, and outsiders, will be coming in to acquire companies across the cannabis marketplace. In recent days, Constellation Brands (the parent Company of Corona and Modelo Beers), acquired a portion of Canopy for 5.4 Billion Dollars. Cigarette manufacturers are seeking potential partners in various markets across the United States for acquisition. However, there are also internal industry mergers occurring as well. Today it was announced that MedMen has purchased PharmaCann for $682 Million dollars in an all stock deal. (https://mjbizdaily.com/medmen-inks-blockbuster-682-million-stock-deal-to-acquire- medical-cannabis-firm-pharmacann/) PharmaCann was a substantial player in the markets, owning provisioning centers, processing facilities and grows in multiple States, including Michigan. To date, this is the largest inside the industry merger and acquisition deal yet. Expect this to continue at a fast pace as more States legalize medical and recreational marijuana.
For the single location provisioning center, this news may not seem like much of anything. However, everyone should pay attention. As these mergers and acquisitions continue, the impact will trickle down to the smaller, single State or single location players. The key to long term survival and ensuring the best possibility of profiting from a future merger or acquisition opportunity: become part of a vertical integration chain.
To do that, you need to have the right connections and industry know how to link up with processors, growers, labs and transporters who can work together, with contractual guarantees and obligations. If that interests you, we can help. Give our office a call
and set up a meeting to discuss all of your options.