Andrew Wilder interviewed by The Globe and Mail
Andrew Wilder, Co-chair of our Cannabis Law Group, was interviewed by The Globe and Mail on why some of the largest cannabis companies have spent 2021 acquiring smaller pot producers in an attempt to boost revenue and expand market share.
Some of the largest cannabis companies have spent much of 2021 acquiring smaller pot producers for hundreds of millions of dollars in an attempt to boost revenue and expand market share, but more often than not, these deals have failed to accomplish either of those goals.
Indeed, 2021 was the year of consolidation in the Canadian industry – Aphria Inc. and Tilray Inc. merged to form the largest pot company in Canada by revenue, Quebec company Hexo Corp. spent more than $700-million buying three cannabis producers (Zenabis Global, 48North Cannabis Corp. and Redecan), and Canopy Growth Corp. scooped up craft producers Ace Valley and The Supreme Cannabis Co. for about $485-million.
But while some of the acquisitions might not have increased revenue in the short run, they could do so eventually, said Andrew Wilder, a partner at Torkin Manes and the co-chair of the firm’s cannabis practice group.
In October, Canopy announced it would buy the Colorado-based edibles manufacturer Wana Brands for US$298-million, and in August, Tilray bought a 21-per-cent stake in California-based cannabis retailer MedMen for $200-million – closing both these deals is contingent upon federal legalization of cannabis in the United States.
“I am not sure I would describe these deals as bad,” Mr. Wilder said. “Companies were motivated to buy for two reasons: to build brand awareness, which is important, and to find a way to enter the American market.”
To read the full article, please visit The Globe and Mail.
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