In a year marked by seemingly limitless cannabis mergers and acquisitions (M&A), the industry’s medical research sub-sector may be appealing to a different kind of acquisition partner.
The pace of M&A in the cannabis market has led many industry observers to wonder when there will be deals with operators outside the space, not simply cannabis companies buying one another.
The question is just what it will take for names in the multibillion-dollar pharmaceutical industry to take a big swing with cannabis opportunities.
Ashley Chiu, a cannabis strategy advisor with EY Canada, told the Investing News Network (INN) Big Pharma is already surrounding the cannabis industry. “They’re quietly in this space,” the expert said.
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However, she thinks current regulations in key markets will hold back any major blockbuster deals.
“It’s still actually quite restrictive to study cannabis … If you look at the US, you still need to have separate licensing permits to have a Schedule 1 substance, to do clinical trials you do need to be (Good Manufacturing Practice) recognized,” said Chiu, who is an expert on M&A strategy and serves as a key advisor to parties examining opportunities in the cannabis space.
The expert wonders how interested big-name pharmaceutical brands will be in terms of buying in early on promising cannabis-based drug candidates — according to Chiu, the business model for these large companies now focuses on more accessible consumer health products.
Source: Investing News