Cannabis MSOs M&A activity

The Talking Hedge

U.S. marijuana multistate operators reported banner revenue growth in the first three months of this year, boosted by good execution and strong consumer demand in established and newer markets.

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.

Show Links: Marijuana MSOs report stellar financials; megamergers could heat up https://mjbizdaily.com/marijuana-msos-report-stellar-financials-megamergers-could-heat-up/ U.S. Companies Pursue Growth through M&A While Canada Consolidates https://www.viridianca.com/chart3

Host: Josh Kincaid, Capital Markets Analyst & host of your cannabis business podcast. https://www.linkedin.com/in/joshkincaid/

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." https://www.theTalkingHedgepodcast.com

Music Info: Song: Beat | Keep On | 2020 Artist: Milochromatic Beats & Song: Dark Trap Beats Hard Rap Instrumental | Gang | 2018 Artist: LuxrayBeats

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