As Cannabis Industry Grows, So Do the M & A Numbers
Growing Marijuana
No, this isn't a technical article about just how to better grow marijuana, or a brand-new hydro system. The cannabis industry is proliferating. With legalization in Canada taking full effect on October 15, 2018, and also extra cannabis legalization measures on ballots throughout the USA, the stigma on the industry is shrinking, and the industry is growing. A look at the stock prices for Tilray, Canopy, Aurora as well as 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 industry. In recent days, Constellation Brands (the parent Company of Corona and Modelo Beers), obtained a section of Canopy for 5.4 Billion Dollars. Cigarette manufacturers are seeking potential partners in numerous markets across the United States for acquisition. Nonetheless, there are additionally internal industry mergers taking place too. Today it was revealed that MedMen has actually acquired PharmaCann for $682 Million dollars in an all stock offer. (https://mjbizdaily.com/medmen-inks-blockbuster-682-million-stock-deal-to-acquire- medical-cannabis-firm-pharmacann/) PharmaCann was a significant player out there, possessing provisioning centers, processing facilities as well as grows in multiple States, including Michigan. To date, this is the biggest inside the industry merger as well as acquisition deal yet. Anticipate this to continue at a fast pace as even more States legalize medical and recreational cannabis.
Day-to-day Impact
For the single location provisioning center, this news may not appear like much of anything. Nevertheless, everybody needs to listen. As these mergers and also acquisitions proceed, the effect will trickle to the smaller, single State or solitary location players. The key to long term survival and ensuring the best possibility of benefiting from a future merger or acquisition possibility: become part of a vertical integration chain.
To do that, you need to have the best connections as well as industry know how to connect with processors, growers, labs and transporters that can collaborate, with legal guarantees as well as obligations. If that interests you, we can aid. Give our office a call
and set up a meeting to talk about all of your options.
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