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Cannabis Industry Set For More Consolidations In 2021

Don’t miss the opportunity to connect with THE cannabis movers and shakers from across the globe during Benzinga’s Virtual Cannabis Capital Conference on February 25-26, 2021. Among the attendees is Centri Business Consulting.

Activity is heating up in the U.S. as the number of states that have legalized marijuana is increasing. With the cannabis market growing stronger than ever and many big players entering the field, an increase in the value of mergers and acquisitions (M&A) have taken place.

Recently, Canada’s Tilray (NASDAQ: TLRY) and Aphria (NASDAQ: APHA) announced a near $4 billion merger. If that wasn’t impressive enough, Jazz Pharmaceuticals’ (NASDAQ: JAZZ) $7.2 billion purchase of GW Pharmaceuticals (NASDAQ: GWPH) earlier in February makes it the biggest tie-up yet for the cannabis industry.

This means something.

For investors, the growing number of M&As demonstrates that the stage is set and there’s money to be had. Multistate operators (MSOs) can take advantage of the ability to expand market operations and grow market share. For small and large cannabis companies, this is an opportunity for massive growth. 

Now many companies are focusing on presenting themselves as an attractive target to potential buyers. This means striving to have positive cashflow, having all federal and state taxes in order and resolving corporate and governance-related matters — positioning themselves ready to take the next step. 

“Consolidation has been a continuing trend in cannabis, and 2021 is no different,” said Centri’s CEO and Managing Partner Michael Aiello. “With companies looking to grow, mergers and acquisitions will dominate the landscape. Competition and crowding are driving the market and larger companies such as MSOs will look to expand their footprint.”

The consulting firm specializes in financial reporting, internal controls, valuation services, IPO/capital markets readiness, technical accounting research and CFO advisory services for companies of various sizes and industries. For clients in the cannabis industry, the firm collaborates with investors, ancillary businesses and regulatory professionals to find solutions for their unique accounting needs and ensure a seamless transition into this emerging market.

At the upcoming virtual cannabis capital conference, Aiello will be moderating a panel with Crowe’s Michael Lux, Zuber Lawler’s Josh Lawler and Golden Eagle Partners’ David Traylor. The panel will discuss the many considerations for companies that are looking to expand in the cannabis industry with the help of M&As.

“With continued consolidation in the cannabis industry, there are many considerations for companies who are looking to grow through M&A. I’m looking forward to discussing these considerations in the consolidation panel discussion.”

The discussion will take place virtually at 11 a.m. EST on February 25. Register today!

Photo by Aleou Eletu

© 2021 Benzinga does not provide investment advice. All rights reserved.

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