Notes from Vancouver Cannabis conference June25 M&A activity strategies
During a panel focused on the recent trend of mergers and acquisition activity in the cannabis space Anthony Holler CEO of Sunniva (CSE:SNN) told the audience his company doesn’t have the same option as some of the larger public players to simply acquire assets and figure out how they integrate into their overall strategy later.
“We can’t do that, that’s impossible for us to do so we have to try and understand the work, understand where the market is going and say ‘we don’t have that skill set,’” Holler said.
Holler added he’s seen through these acquisitions people involved with them don’t end up as part of the transactions. Instead, he said, his strategy is to bring in the people at the center of his acquisition.
“We don’t buy people and then say ‘why don’t you get lost, we don’t need you,’” Holler said of M&A strategy.
Yasmin Gordon, a senior investment advisor for Canaccord Genuity told the room she has noticed a trend of less risk when it comes to financing options for cannabis companies. The entry of Canadian banks into the financing sector for cannabis companies adds to the de-risking trend.
The group of speakers for the CSE-led panel was asked about the high valuations cannabis companies are seeing when a lot of questions remain on the actual size of their revenues and potential legitimate growth.
Arthur Kwan, managing partner with Athena Capital Advisors and CEO of CannaIncome Fund Corporation, said he sees these companies still in the emerging phase with a bulk of their revenues arriving later–but still coming.
Kwan explained when looking at metrics such as revenue and earnings before interest, tax, depreciation and amortization (EBITDA) compared to previous years, prices for these companies start to become “a bit more reasonable… still expensive, but justifiable.”