Cannabiz Media Archives - Green Market Report

Debra BorchardtJune 7, 2022
money4-2.jpg?fit=960%2C640&ssl=1

3min7140

Cannabiz Media recently did a deep dive into the deal makers to see which advisors were leading the pack and Canaccord Genuity (OTC: CCORF) comes out on top. Of the 137 recognized deals, Canaccord Genuity is the financial leader advising on 22 of the 137 deals. ATB Capital Markets was a distant second with 10 deals. Canaccord is also the leader on both the buy and sell-side components. Canaccord is listed as having advised on$8.1 billion in deals.

Just last week, Canaccord announced that Aurora Cannabis Inc.  (NASDAQ: ACB) (TSX: ACB) closed its previously announced bought deal of units raising $172.5 million. Canaccord Genuity acted as lead-left bookrunner to the Offering. In April, Canaccord was the exclusive financial advisor to RiteGene Technologies on its sale to Bloom Medicinals.

In March Canaccord acted as financial advisor to Columbia Care on one of the largest recent deals in the cannabis industry with Cresco Labs buying Col-Care. The pro forma entity will be the largest multi-state operator by pro-forma revenue, with a combined fourth quarter 2021 annualized revenue of $1.4 billion. The pro forma entity will have 130 dispensaries across an 18 market footprint and will cover all 10 of BDSA’s top-10 largest and fastest-growing markets by 2025, representing ~55% of the U.S. population and over 70% of the addressable U.S. cannabis market.

Cannabiz Media tracks the license assets as they move from company to company. When capital contracts, the company said it sees a pause in transactions and as many have pointed out, a lot of the big deals are likely done.  Author Ed Keating wrote, “Second tier MSOs and single state operators may be the next wave of participants.”

Cannabiz said it researched the details on over 500 M&A transactions in the cannabis, hemp, and ancillary space. The company said in its report, “When available, we have gathered information on the legal and financial advisors who assisted the buyers and sellers. Our research has identified 133 firms that advised on 137 M&A transactions.” The company also noted that the information might not be complete.

Legal Advisors

When it comes to the legal side of the equation, Bennet Jones leads the pack with 15 deals valued at $6.8 billion. The company also led on both the buy-side and sell-side of the transactions.


StaffApril 22, 2022
shutterstock_256424509.jpg?fit=1200%2C800&ssl=1

7min15760

This article was republished with permission from Cannabiz Media. 

Cannabiz Media has been tracking cannabis and hemp licenses globally since 2015. Over those seven years, we have aggregated a mass of data on licenses, companies, and transactions that result in change of license ownership.

After compiling 500 transactions in our Cannabiz Intelligence platform, we wanted to take a closer look at how key publicly traded MSOs were adding to their store footprints. Our goal was to determine which stores were “built” versus those that were “bought”.

Key Findings

  • Almost 12% of US cannabis stores are owned by a public company.
  • 338 of these stores have changed hands, and 29 public companies were involved in these transactions.
  • Almost 60% of the store acquisitions occurred in five states (Florida, Colorado, Pennsylvania, California, and Arizona).
  • The number of stores changing hands has increased every year. In 2021, we found 185 stores that were purchased, up from 53 in 2020.

Background

According to the Cannabiz Media License Database, there are currently 8,909 stores/dispensaries in the US. Of those licenses, 1,048 (11.8%) are owned by public companies, and we found 338 stores that changed hands. A total of 29 public companies were involved in these transactions.

The graph below shows the number of stores that have changed hands. We only included closed deals.

Leaderboard

In trying to assess the footprint impact, we compiled the number of stores bought against the number built or awarded. The Leaderboard below shows public MSOs that bought at least 10 stores.

Based on our analysis, Trulieve has bought the most stores (54), and that accounts for 32% of its footprint. AYR Wellness purchased 42, accounting for 62% of its stores. Curaleaf, a company with a very large footprint, has only acquired 15 stores. $1.2B was spent by these firms to acquire these licenses.

 

  • In the table above, Schwazze bought 77% of its licenses with AYR Wellness at 62%. Cresco comes in third at 56% though this will change once the Columbia Care acquisition is complete.
  • Verano spent the most at $202 million with Cresco at $178 million and Trulieve at $176 million.
  • Verano paid the most per store at $9.64 million while Schwazze paid the least at $1.79 million.

Geography

More stores were acquired in limited license states rather than unlimited license states. Limited license environments are more predictable thanks to the oligopolistic protections afforded by the regulations.  Early entrants are well positioned when the inevitable adult use market opens, and they have advantages including customers, marketing, branding, real estate and established relationships with regulators.

The M&A Hotspots Table shows the states that public MSO’s invested in.

Conclusion

We do not see this trend ending anytime soon. The latest blockbuster deal of Cresco and Columbia Care will run into license cap issues in some states, and this will require divestiture. In future posts, we plan to look at the license cap issue and delve into which states have had their licenses MSO’d – like Connecticut. We welcome your questions as well, so reach out directly to ekeating @cannabiz.media.

Methodology

Analysis like this is as much art as science, so here is some of the logic we applied:

  • Only active licenses are counted. Pending and applied are not included, nor are future licenses that a company has the right to operate. This approach makes some of the Pennsylvania licenses look very expensive as operators bought these licenses knowing they could run multiple stores.
  • In large deals where a variety of assets were acquired, we backed out the value of cultivation/manufacturing assets based on comparable transactions when available.
  • We strive to be comprehensive but we may not have caught every deal, and in some cases, the MSO may have deemed a small acquisition as immaterial.
  • In addition to the Cannabiz Intelligence platform, the team derived deal data from SEC and SEDAR filings as well as company press releases, investor decks, and investor relations staff.

Authors

Ed Keating is a co-founder of Cannabiz Media and oversees the company’s data research and government relations efforts. He has spent his career working with and advising information companies in the compliance space. Ed has managed product, marketing, and sales while overseeing complex multijurisdictional product lines in the securities, corporate, UCC, safety, environmental, and human resource markets.

Shea Sanford is Product Manager for Cannabiz Media’s Cannabiz Intelligence product.  He’s responsible for sleuthing out corporate transactions and keeping track of MSOs, SSOs, REITs, SPACs and any other acronyms we can find.

Cannabiz Media customers can stay up-to-date on these and other new licenses through our newsletters, alerts, and reports modules. Subscribe to our newsletter to receive these weekly reports delivered to your inbox. Or you can schedule a demo for more information on how to access the Cannabiz Media License Database yourself to dive further into this data.

 


Debra BorchardtJuly 31, 2020
Oklahoma.jpg?fit=960%2C640&ssl=1

8min802911

Oklahoma has essentially been shunned by the largest multi-state operators (MSO’s) in the country. Most legal states tend to have a handful of MSO’s who plant their flags and make a big showing. Cresco Labs in Illinois or Trulieve in Florida and great examples of this. However, Oklahoma is a massively fractured market when it comes to ownership and the jury is out on whether it’s a good idea or not.

Oklahoma’s Market Size

Medical marijuana was legalized in Oklahoma through a ballot referendum in 2018. The state looked like it was on track to move forward for full legalization, but that has been delayed by the pandemic. The state has been on a licensing frenzy with over 7,000 businesses approved. 

Oklahoma is now forecast to make it to the top ten list of states for per capita spending on cannabis. The per capita spending as per a recent ArcView/BDSA report showed Oklahoma at $90.40 in 2019 spending and that is projected to grow to $226.40 by 2025. 

The state recorded $365 million in sales in 2019, the first full year, and that number is estimated to grow to $950 million by 2025. That will be even bigger than Pennsylvania’s estimated $770 million in 2025. The legit market took 30% away from the illicit market almost immediately. 

These numbers would seem to be enough to entice a big MSO to head to the Sooner State, but that hasn’t happened. According to Cannabiz Media, 6,088 license holders only have one license, while 619 held multiple licenses. There are none of the familiar names in the top 25 license holders list. 

Everyone Gets A License

One of the biggest differences for Oklahoma’s program is the liberal approach to licensing and the low 4% tax rate. Unlike the millions of dollars that it costs in most states to procure a cannabis license. it only costs $2500 to get a license in this state. A refreshing difference, but as one unnamed cultivation vendor put it, “I expect to see my products for sale in two years on CraigsList or eBay.” 

The state has registered 5.8% of the population for medical marijuana patient cards. That is expected to grow to 10% in 2025. By comparison, Nevada only registered 1.2% and Oregon was at 2.5% in 2014 at its peak. With no qualifying conditions, doctors are free to recommend medical marijuana for any reason they deem fit. Like other states, many of these patients are actually recreational users and if full legalization happens, they are likely to drop their medical cards.

Producers Paradise

The numerous dispensaries though are great for brands. Oklahoma is home to the second most dispensaries per capita, which equals 15.6 dispensaries per 100,000 residents. A new report from Verilife wrote, “It’s interesting to note that while Oklahoma has the most marijuana dispensaries per capita, it has generated the least amount of tax revenue from cannabis out of all the states where marijuana is legal. The state is home to nearly 600 dispensaries but generated only $70,000 from marijuana in 2018.”

According to LeafLink, Smokiez Edibles is the number one brand in the state. The brand also sells its products in California, Washington, and Oregon and comes from a California-based privately-held company called LoudPack Inc. This quiet brand has been amassing numerous awards for its quality and quickly looked to the state as a place to dominate. 

Top Oklahoma Brands on LeafLink in 2020 – 7/29/20

  • Smokiez Edibles
  • US Cannabis Pharma
  • Pharmicated
  • Cartel Oil Co
  • Sublime Brands OK

Top Oklahoma Products on LeafLink in 2020

  • Maui Waui Outdoor Flower from Argent Cannabis
  • KIMBO KUSH from Happy Hour Medicinals
  • Sublime 100mg Caramel Chew from Sublime Brands OK
  • Multi-Piece Watermelon 250mg Sweet Fruit Chews from Smokiez Edibles
  • 500mg GANJA GUMMIES from CANNA BASICS

Colorado-based edible brand 1906 said it was choosing to enter into the Oklahoma market in lieu of California and Oregon, due to the state’s burgeoning cannabis scene within its major cities such as Tulsa, Oklahoma City, and Norman. The brand is aiming to become not only the largest edibles company in Oklahoma but west of the Rocky Mountains. The promise Oklahoma holds is the brand’s first foray into becoming the market leader in the emerging region.

1906 CEO Peter Barsoom said, “Oklahoma is the most “free market” of medical and adult use markets with low barriers to entry for patients and business owners. As a result, you have a vibrant market with one of the highest per capita patient counts, competitive prices, and high accessibility (lots of dispensaries). Which had translated into one of the largest medical marijuana markets.”

He added, “The financial success of MSOs is dependent on regulatory arbitrage. Keeping competition out, prices high, and vertical integration requirements. So if those are the requisites of success for an MSO, Oklahoma is not an attractive market. The business model of most MSOs is dependent on a supply-constrained large arbitrage between the cost to cultivate cannabis and the cost the consumer/patient pays.” 


StaffMarch 5, 2020
monitor-phone_11-19-2019_brochure-scaled.jpg?fit=1200%2C1021&ssl=1

3min18780

Full birth name:  Ed Keating

Title:  Co-founder & Chief Data Officer

Company:  Cannabiz Media

Years at current company: 5

Education profile:  I received a BA in Russian Studies with a minor in Economics from Hamilton College.  After moving to Chicago, I got an MBA from the Kellogg School at Northwestern University with concentrations in Strategy and Marketing.

Most successful professional accomplishment before cannabis: While working for a Fortune 500 publisher I launched a workflow practice system that helped public companies create, manage and file their key Securities & Exchange Commission filings electronically.

Company Mission:  At Cannabiz Media, we are proud to be the leading provider of go-to-market solutions for the cannabis and hemp industry by breaking down barriers brought on by confusing state-specific licensing and regulations. As the industry’s verified source of license holder contact information and operational data, we are fanatical about creating a simplified experience that holistically supports business development strategies by fusing lead generation, email marketing, and analytics, up-to-date regulatory information and news, compliance verification, and a sales CRM all within one easy-to-use platform. 

Company’s most successful achievement:  Bootstrapping a cash flow positive and profitable company in the tumultuous cannabis space.

Has the company raised any capital (yes or no): No

if so, how much?:

Any plans on raising capital in the future? No plans at this point.

Most important company 5-year goal:

Our goal is to better understand and penetrate the cannabis economy.  Worldwide we are tracking almost 100,000 cannabis and hemp licenses along with the companies that own them and the people who work in these businesses.  In the coming years, we’ll be increasing our relationships with key trade associations and the vendor community. This will provide our customers with one place to see and interact with the entire cannabis ecosystem.


Video StaffDecember 30, 2019

1min13970

Cannabis industry experts like Al Harrington from Viola and Ed Keating with CannaBiz Media believe there will be more consolidation within the cannabis industry in 2020. Sadly, some expect to hear of more failures as many entered the space thinking it would be easier that it is. Thank you for watching the Green Market Report! Be sure to subscribe to stay up to date with all out videos.


Video StaffMay 21, 2018

1min28440

The Green Market Report wanted to know what cannabis industry experts thought was the hottest sector in the industry. We asked these leaders at the recently held Cannabis Learn event in Philadelphia. Comments from Lori Glauser of Evio Labs, Ed Keating of Cannabiz Media, Emily Paxhia of Poseidon Asset Management, Jared Mirsky of Wick & Mortar and Matthew Nordgren of Arcadian Fund.


Choose Your News

Subscribe to the Green Market Report newsletter that gives you original content delivered straight to your inbox.

 Subscribe

We respect your privacy. See our privacy policy.


About Us

The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


READ MORE



Recent Tweets

@GreenMarketRpt – 2 days

5 Cannabis Stock Picks From Viridian

@GreenMarketRpt – 2 days

RT : AMAZING account of how consumer brands are using the psychedelic buzzword to market legal non-psychedelic products explo…

@GreenMarketRpt – 2 days

RT : Founder and managing principal of , Matt Hawkins, spoke with on primarily private-side investors in…

Back to Top

Choose Your News

Subscribe to the Green Market Report newsletter that gives you original content delivered straight to your inbox.

 Subscribe

We respect your privacy. See our privacy policy.