Mergers and acquisitions are defining the moment in legal cannabis — but bringing a new company into the house doesn’t always mean instant success.
Expected to reach $45 billion in revenue by 2025, cannabis is running full speed ahead toward mainstream acceptance, normalization and maturity; and its pace is as dizzying as its M&A activity.
Regulated on a state-by-state basis, this fragmented nature of cannabis licensing means that M&A activity would be an efficient engine for cannabis companies interested in growing a national footprint ahead of potential federal legalization.
In my experience, one of the best predictors of M&A success is typically the length of integration, and in cannabis, this process can average a lengthy period of time.
MSOs can no longer afford to underestimate the costly and lengthy challenges that come with manual supply chain data aggregation and the combining of disjointed accounting systems and processes.
As the cannabis industry matures, the need to track supplies and shipping logistics, forecast global supply and demand overages and shortages, resist procurement duplication, standardize systems, increase buying power, and streamline operations consistently and transparently is cardinal.
Such supply chain disruptions can be devastating to individual cannabis businesses; when multiplied across the expansive footprint of an MSO in the midst of M&A integration, such disruptions could mean the beginning of an MSO extinction event.
Ensuring proper transparency and speed in the cannabis supply chain is key to moving our M&A-driven industry forward.
Moving at the speed of cannabis means that MSOs need better and faster ways to source materials as well as track the money sloshing around as they merge and acquire in order to survive for tomorrow.
Our industry also has a unique opportunity to redefine how industries purchase and how they supply, leveraging competitive pricing while maintaining their purchasing power.