And it’s not just in California. What’s happening to that friend of yours who struggled to get compliance on the other side of the state? A similar buyout/land-grab phenomenon is sweeping the nation.
- “The availability of capital in public markets, especially Canada, has accelerated things,” said Josh Wurzer, president of SC Laboratories in Santa Cruz. “Some of those companies are new and looking to use their cash reserves to scale quickly.”
- Two examples of the unprecedented consolidation came this spring. Canadian juggernaugt Canopy Growth said it would acquire Acreage Holdings in a deal worth $3.4B, pending U.S. federal legalization. In May, Canadian producer Sunniva bought ownership of two California cannabis companies, 420 Distribution and Coachella Distillation.
- Big business norms are establishing themselves. Take Harvest, which runs two grows in Pennsylvania that someone else owns. Under a management service agreement Harvest takes as much as 90% of the farm’s revenue. The farm owner merely holds the permit.
- All the consolidation activity is making “pro-forma” reporting more common. What that means is companies are reporting “what the company’s revenue might be if all pending or recently completed acquisitions had been closed for the entire reporting period.”
- The Lady Jane Society is offering a weekend retreat later this month for Central Valley women working in cannabis. Over 200 women are expected to take part.