In the past several months, there has been an increase in both capital raising and M&A as multistate operators seek to strengthen and expand their footprints in high-potential markets.
Canadian Mergers & Acquisitions ground to a near standstill from the 2nd half of 2019 through 2020, while U.S. activity remained robust.
The U.S. dominance was supported by large transactions like the Curaleaf & Select deal of $949 million in Q1:20 and $830 million Grass Roots deal in Q3:20.
Activity in both countries has spiked upward this year. U.S. activity benefitted from an increase in acquisitions of public companies including Liberty Health, Helix TCS, and Bluma Wellness. Canadian activity included a $353 million Canopy Growth divestiture of its ownership in Canopy Rivers.
Activity has accelerated in the second quarter with the recently completed $4.5B Tilray/Aphria megamerger in Canada and the $2.1B Trulieve/Harvest deal announced in the U.S.
Although consolidation among Canadian LPs in pursuit of positive cash flow is likely to continue, the superior growth potential of the U.S. market is expected to keep U.S. targets at the forefront of M&A activity.
Marijuana MSOs report stellar financials; megamergers could heat up
U.S. Companies Pursue Growth through M&A While Canada Consolidates
Josh Kincaid, Capital Markets Analyst & host of your cannabis business podcast.
Episode 754 of The Talking Hedge:
Your Cannabis Business Podcast.
Covering cannabis business news, interviews, investments, events, products, reviews, and some random stuff. But as Jay-Z said "it's only entertainment."
Song: Beat | Keep On | 2020
Artist: Milochromatic Beats
Song: Dark Trap Beats Hard Rap Instrumental | Gang | 2018
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Josh is not an investment adviser. The Talking Hedge is long gold and silver. Listeners should always speak to their personal financial advisers.
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