2021’s Cannabis Mergers and Acquisitions
Just in May, there were several substantial merger announcements in cannabis:
- Hexo Corp. (NYSE: HEXO) just announced its $768 million acquisition of Redecan — a privately owned licensed producer in Canada.
- Curaleaf Holdings Inc. (OTC: CURLF) is acquiring one of the largest outdoor cultivation facilities in the U.S. for about $67 million — Colorado-based Los Suenos Farms.
- Trulieve Cannabis Corp. (OTC: TCNNF) announced a $2.1 billion acquisition of Harvest Health and Recreation, a Florida-based brand.
- GrowGeneration Corp. (Nasdaq: GRWG) has announced nine different acquisitions in 2021, according to Cannabis Business Times.
And 2021 kicked off with Ireland-based Jazz Pharmaceuticals PLC (Nasdaq: JAZZ) signing a $7.2 billion deal to acquire British pharma company GW Pharmaceuticals PLC (OTC: GWPRF).
All of these M&A deals in 2021 are coming though capital is still hard to come by for cannabis companies.
Until banking restrictions lift, cannabis companies have to dig into profits to enter into any M&A deals. As a result, what we’ll witness this year and in future years — regardless of where federal legalization stands — is the continued consolidation of the cannabis sector.
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Bigger companies will look to small-scale cannabis businesses as an easy way to get footholds in new markets.
Larger cannabis businesses will be strategic in their deals — looking for companies in states in which they can gain a larger footprint and companies that can scale.
California still has a large group of independent operators, which could be prime ground for larger cannabis companies to seek out mergers.
Source: Moneyandmarkets
