January 10, 2019
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At the upcoming Cannabis Conference in Las Vegas, produced by Cannabis Business Times and Cannabis Dispensary Magazine, industry insiders will share insights into the cannabis industry, including trends related to cannabis market consolidation.
Looking back on the past 12 months in the fragmented cannabis markets of North America, one of the clearest trends is a sharp increase in mergers and acquisitions (M&A). With goals ranging from gathering market share to growing their management teams, companies are increasingly looking across state lines for enticing ventures.
Companies like Acreage Holdings, Green Thumb Industries and MedMen are acquiring cannabis licenses across the U.S., building on established industry acumen to get boots on the ground in new, emerging markets (like Florida, New York, or Arizona). As more states begin to develop cannabis regulations, amid a wave of legalization that’s now come across the entire U.S., the typical procedure has been to limit the number of business licenses. This inherent scarcity drives rapidly escalating valuations.
At the higher end, this means companies like Constellation Brands and Altria (makers of Corona beer and Marlboro cigarettes, respectively) are investing billions of dollars into massive Canadian licensed cannabis producers. Through these gargantuan investments, often complete with longer-term options for further equity stakes, consumer-packaged goods companies are lining up their footholds in the cannabis marketplace.
Canada’s adult-use cannabis marketplace opened for business on October 17, 2018, but—bear in mind—the country’s population is only 37 million to the U.S.’s 327 million. The target market for these sprawling corporate ventures is the U.S. and its increasing consumer demand for innovative cannabis products and access to solid research and education.
READ MORE: Sign up for M&A Weekly, a must-read mergers and acquisitions newsletters from the editors of Cannabis Business Times and Cannabis Dispensary.
That’s where another, increasingly visible objective in cannabis M&A comes in: vertical integration and technology. Rather than simply buying up licenses and real estate parcels, many companies are building a portfolio of businesses that touch on all points of the cannabis supply chain.
Market share and technological innovation are just two silos that explain the cannabis industry’s fast-paced M&A fever—but they’re two sides of the same coin that you’ll want to watch in the months ahead.
You can get inside information on the cannabis market and the growing M&A fever from industry experts at Cannabis Conference. This year, the conference will bring industry stakeholders together to engage the biggest opportunities and challenges facing the legal cannabis market. The three-day event will be held at Westgate Las Vegas Resort and Casino in Las Vegas, Nevada on April 1-3, 2019.
This premier industry event will offer unprecedented insights into the dynamic cannabis space at a time when business growth and legalization are intersecting in new markets almost every day. Growers and dispensary employees, all levels of management, and owners of cultivation businesses will gain solid insights to help ensure their companies are successful over the long term.
To register and learn more about the everchanging Cannabis Market at Cannabis Conference.
Eric Sandy is the digital editor of Cannabis Business Times and Cannabis Dispensary.
