Cannabis M&A activity intensifies as investor sentiment brightens since November election

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marijuana acquisitions

Cannabis mergers and acquisitions are heating up, with more than $600 million worth of deals announced on Tuesday alone – and that’s on top of additional transactions unveiled since the U.S. presidential election last month.

New York-based multistate marijuana operator Columbia Care on Tuesday announced a definitive agreement to acquire privately held Green Leaf Medical for $240 million, expanding its presence in the mid-Atlantic region.

Ayr Strategies, of New York and Toronto, announced a proposed $290 million all-stock acquisition of Liberty Health Sciences and a $101 million acquisition of a licensed New Jersey medical marijuana operator with three dispensaries.

The two announcements are just the latest signs that M&A activity has picked up in North America and capital has loosened since the Nov. 3 vote, which saw a clean sweep of ballot initiatives in five states.

Since the election, privately held Verano Holdings and AltMed agreed to merge, and now Verano is poised to go public at a $2.8 billion valuation. Smaller acquisitions also have been announced, as have capital-raising deals.

Moreover, M&A activity has picked up north of the border.

On Dec. 16, Canadian cannabis companies Aphria and Tilray announced plans to merge in a transaction that would create a giant international marijuana firm with combined equity value of approximately 5 billion Canadian dollars ($3.9 billion).

“We are at an inflection point where the growth prospects and legitimacy of the cannabis industry are beginning to materialize,” Matt Karnes, founder of GreenWave Advisors in New York City, wrote in an email to Marijuana Business Daily on Tuesday.

“The results of this year’s election bring a green wave of new, legalized state markets. And with an incoming, pro-cannabis Biden administration, investor sentiment has intensified.

“Under these circumstances, the heightened level of M&A comes as no surprise as the land grab for quality assets continues.”

Karnes added that “regardless of economic uncertainty that looms around COVID-19 …  the industry is still in the early innings and we expect even more M&A activity in 2021, particularly if laws are eased at the federal level. ”

Adult-use legalization victories in Arizona, Montana, New Jersey and South Dakota, and medical marijuana wins in Mississippi and South Dakota are expected to generate more than $2.5 billion in annual sales by 2024, according to MJBizDaily projections.

The ballot-box win in New Jersey is expected to create an adult-use domino effect through the Northeast and Mid-Atlantic regions.

Columbia Care’s buying spree

Columbia Care’s acquisition of Maryland-based Green Leaf is noteworthy for a few reasons:

  • It expands Columbia Care’s footprint in four key, limited-license markets: Maryland, Ohio, Pennsylvania and Virginia.
  • Green Leaf also has large wholesale operations in both Pennsylvania and Maryland, with products including extracts and pre-rolls sold under its gLeaf brand.
  • In Maryland and Virginia, Columbia Care hopes to capitalize on Green Leaf’s online ordering and home delivery operation through its gLeaf marketplace platform.

Columbia Care CEO Nicholas Vita said in a statement that the deal affirms the multistate operator’s position in those four key states – “three of which are expected to convert from medical to adult use in the next 24 months.”

He said Ohio and Pennsylvania already are two of Columbia Care’s top-performing markets by revenue.

The acquisition of Green Leaf is expected to close in the summer of 2021, according to Columbia Care.

Columbia Care said it plans to retain the entire Green Leaf management team, including CEO and co-founder Philip Goldberg, who is expected to join the New York company’s board of directors.

Ayr Strategies expands footprint

As for Ayr Strategies, the company said it will have operations in seven states, including four adult-use markets, when counting the two transactions announced Tuesday as well as pending deals.

Ayr’s $101 million acquisition in New Jersey, which includes $41 million in cash, involves Garden State Dispensary, one of only 12 licensed vertical medical marijuana operators in the state.

New Jersey lawmakers passed a recreational marijuana implementation bill on Dec. 17 that will give licensed MMJ operators a fast track into adult use as soon as the third or fourth quarter of 2021 – if they prove they can continue to meet medical cannabis demand.

The assets being acquired from Toronto-based Liberty Health Sciences include a 387-acre cultivation campus in Gainesville, Florida, with more than 300,000 square feet of production facilities in operation.

Liberty also has 28 dispensaries in operation in Florida, seven completed and ready-to-open MMJ retail outlets as well as seven others under construction. Ayr said it will spend $15 million to expand cultivation facilities and the retail footprint.

Liberty currently employs 335 people, all of whom are expected to be retained by Ayr.

“Today’s announcements represent a transformational next step for Ayr as a leading multistate operator in the U.S.,” Ayr CEO and Chair Jonathan Sandelman said in a statement.

“Our strategy has always been to go deep in the best markets, targeting attractive assets in limited-license states with large populations, where we can build a vertically integrated presence and have a significant edge.

“New Jersey will be a leading force in adult-use legalization in 2021, and we look forward to working with the regulators to ensure a safe and robust rollout of the adult-use program.

“Florida has one of the country’s most robust and rapidly growing medical programs, and we are acquiring one of the largest operators in terms of store count.”

Jeff Smith can be reached at