Bloomberg Law has a fascinating piece on why patents are so valuable for cannabis companies.

Bottom line: It’s a way companies can distinguish themselves to potential acquirers.

  • “There’s no second place in patents,” JiNan Glasgow George, a patent attorney and chief executive of market research and analysis firm Magic Number, said. “If you can’t build it, you have to acquire it,” she said.
  • The piece notes, “The number of cannabis-related U.S. patent filings from 2016 through 2018 totaled 767—more than 1.5 times the applications filed from 2013 through 2015, according to Magic Number. Global M&As involving cannabis doubled to 323 from 2017-18, according to Viridian Capital Advisors.”
  • Thus far not as many patents are being enforced, a lawyer notes. Patents can only be enforced in federal courts, and therefore mostly aren’t. (Yet.)
  • The “poster-child” for the trend is Colorado based Ebbu, which has nine patent applications and was acquired by Canopy Growth last year.
  • I wrote about Ebbu’s earlier days in 2016.