Do deals signal things looking up for the cannabis industry?

YEAR END
Signs of life from publicly-traded cannabis companies?

What happened? Despite the doom-and-gloom in the cannabis industry, publicly traded firms are ramping up dealmaking as the year comes to a close. This week, we heard from  Vireo about their raising a bunch of capital and a few weeks back, we learned that Organigram was acquiring Motif to become the largest cannabis company in Canada, by market share. 

From Vireo: Minnesota-based Vireo had a double-whammy of an announcements on Wednesday. First, that they’d raised $75 million, and second, that they were acquiring four single-state cannabis companies in a series of all-stock transactions totalling $397 million. 

For those that track such things, Vireo will now be active in 7 states with 9 cultivation facilities and 48 dispensaries.

And, Organigram: New Brunswick, Canada-based Organigram released their quarterly earnings yesterday and showed that revenue was up, that they finalized the acquisition of Motif, and — importantly — are in deal-making mode. Their deal-making is made possible by a sizable investment from British American Tobacco (BAT).

So what? This has certainly been a challenging year for the cannabis industry. That’s no secret. Just yesterday, we posted about the plummeting price of flower in Michigan, one of the US’s largest cannabis markets. But, but, but — there may be signs of hope on the horizon:

• DC cannabis vibes: The Trump Administration will be in office in January, and the President-elect has voiced support for rescheduling and banking reform. The rescheduling process isn’t as fast as many would like, but the process is slated to move forward in Q1 and Q2 next year. 

• New York and other markets: New York’s slow-starting cannabis market appears to be on the uptick with store openings happening on a daily basis and sales records being broken. Similar growth trends were reported this week in Massachusetts and Michigan.

What’s next? In a few weeks, we’ll flip the calendar to 2025 and a few weeks later get a new Congress and a new Administration. And, we already know that there is movement afoot in Pennsylvania and Wisconsin to consider legalization. There’s even a Hail Mary bill in Texas to legalize!

Hold tight. 2025 is going to be a heck of a ride.

-JR

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“If you’re in a state that’s not legalized, then you’re naive if you don’t think they’re gambling—in the same way that if you’re in a state that doesn’t have pot legal, then you’re going to the Eastern Band of the Cherokee and buying pot that, for some reason, you can buy in western North Carolina…” North Carolina Republican Senator Thom Tillis said during a hearing on State-legalized gambling.

Tillis drew the parallel between legal gambling on a state-by-state basis and cannabis legalization on a state-by-state basis. Read more from Marijuana Moment.

Organigram reported its fourth-quarter and full year results on Wednesday. The company lost $45 million (CAD) on $160 million of revenue for the full year, and a $5.4 million net loss on nearly $45 million of revenue for Q4 — up 22% from the same quarter the year prior.

The Manhattan Institute, a conservative think tank, conducted some wide-ranging polling research and included cannabis questions to gauge public sentiment. Nearly 70% of people say consuming cannabis in one’s own home should be legal, but only 43% say selling marijuana should be legal.

Here are the findings: 

A handful of Pa. doctors approved 1/3 of medical marijuana cards in a single year. Experts question the quality of care. | WFMZ-TV