Ripe for the Picking | Cannabis M&A predictions for 2022
Low stock prices are likely to motivate more cannabis mergers and acquisitions in 2022, reports Insider.
Ripe for the picking
According to Viridian analyst Jonathan DeCourcey, these seven companies are “ripe acquisition targets”:
- 4Front Ventures (FFNT)
- Cansortium (TIUM.U)
- Goodness Growth Holdings (GDNS)
- Harborside (HBOR)
- Lowell Farms (LOWL)
- Planet 13 (PLTH)
- Schwazze (SHWZ)
Takeaway
While the industry has seen significant M&A activity in 2021, 2022 could be an even more dynamic year – with legalization (and SAFE Banking) slow-going in DC – and new, significant markets opening up (NJ, NY) – the big are looking to get bigger and the small are looking for help (and money).
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The Future of Lounging Around | Cannabis lounges to host higher margin product sales
Cannabis bars or lounges are designed to sell higher margin and premium products like cannabis drinks, edibles and capsules out of cannabis lounges, reports CNBC on location at a Green Thumb Industries (GTI) lounge.
The breakdown
Only 10% of the $31 billion cannabis market is made up of edibles – while capsules and drinks make up just 1% apiece of the market. But could that change if there were consumption sites. Some companies are bullish.
On another Planet
The Las Vegas strip will play host to Planet 13’s new cannabis lounge, scheduled to open in 2022 and believed to be the largest in the world – and will certainly be watched closely by the booming cannabis industry in Nevada. And New York’s pending legalization has included considerable conversation about including consumption sites. (We’re looking at you Happy Munkey.)
Loyalty-builder
GTI’s Ben Kovler said his company’s lounges will grow loyalty to the company’s brands — something customers are willing to pay premium prices for once the relationship is there.
A Very LSE Downtown | Why prices have plummeted for London Stock Exchange-listed companies
Cannabis stocks listed on the LSE in 2020 have dropped by nearly £200 million in 2021, reports BusinessCann.
Bubble or declining demand?
“The ‘boom’ wasn’t a boom,” said Memery Crystal senior partner Nick Davis. Pent-up demand and a flurry of M&A, like Jazz Pharma’s acquisition of GQ Pharmaceuticals and Curaleaf’s purchase of EMACC, brought a huge injection of liquidity into the market and stocks were oversubscribed, said one advisor. “And that inevitably fizzled out.”
Expect more volatility
The lack of long-term, institutional investment means prices will continue to swing, said an unnamed investor. “I think because these stocks are predominantly retail-led, the heroes can go to zeros and back to heroes very, very quickly.”
