Despite End-Of-Year Spike, Cannabis Capital Raises For 2019 Lagged Compared To 2018

The Viridian Cannabis Deal Tracker is an information service that monitors capital raise and M&A activity in the legal cannabis industry.

Benzinga · 01/08/2020 18:05

The Viridian Cannabis Deal Tracker is an information service that monitors capital raise and M&A activity in the legal cannabis industry. Analyzing within 12 key industry sectors, the Viridian Cannabis Deal Tracker provides cannabis companies, investors, and acquirers with the data, trends, and intelligence they need to make informed decisions regarding deal valuations, terms, and structures. Since its inception, the Viridian Cannabis Deal Tracker has tracked and analyzed more than 2,400 capital raises totaling over $29 billion as well as more than 900 M&A transactions. Find it exclusively on Benzinga Cannabis every week!

INVESTMENT AND M&A ACTIVITY IN THE CANNABIS INDUSTRY

12/16/2019 - 12/27/2019

CAPITAL RAISES

  • Capital raise activity in the last two weeks of 2019 closed with a bang both in terms of number of deals (10 vs. 4 in the prior year period) and aggregate dollars raised ($223.5M vs. $6.3M in the prior year period).
  • This represents a significant shift from the month’s long decline in capital raise activity and likely portends an increase in M&A activity in 2020, as strengthened balance sheets will support buyer’s activity.
  • The Cultivation & Retail sector continued to dominate capital raise activity, led by The Green Organic Dutchman (a leading Canadian licensed operator) and U.S. Multi-State Operators (MSO’s) – a reflection of both capital required to scale existing operations and for expansion into multiple states.
  • The Biotech/Pharma sector showed 2 capital raises totaling $35.0M, an indication of continued investor interest in the R&D/clinical trials/drug development opportunity in cannabis.

MERGERS & ACQUISITIONS

  • The decline in M&A transactional activity in 2019 continued through year-end, with only 1 reported deal vs. 12 for the same period in 2018.
  • This was long awaited merger of Tilray and Privateer.
  • We are seeing more merger vs. acquisition activity as consolidation is still occurring in a fragmented industry but the decline in market caps and capital raise activity limits buyer’s desire/ability to use cash as acquisition consideration.
  • We foresee an uptick in M&A activity in 2020 that is more defensive and strategic in nature, and less of the “land-grab” mentality than we witnessed from 2016 through the first quarter of 2019.

WEEKLY SUMMARY

CAPITAL RAISES

See Also: Data: Cannabis M&A And Raises Tanking Hard As 2020 Approaches

MERGERS & ACQUISITIONS

YEAR-TO-DATE SUMMARY

CAPITAL RAISES

Capital Raises by Week

Capital Raises by Sector

MERGERS & ACQUISITIONS

 

M&A Activity by Week

M&A Activity by Sector

 

Photo by Javier Hasse.

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.