I subscribe to the newsletter of ICBC (International Cannabis Business Conference) after attending an event they hosted in my area last fall. It was pretty cool, Henry Rollins was the keynote speaker, so they definitely know how to draw in big names to their conferences. The primary theme was industry compliance in various capacities and included booths of marijuana industry vendors ready to assist cannabis companies of all sorts do better business.
Here is the website of ICBC:
https://internationalcbc.com/
Henry Rollins at an ICBC conference I attended in 2017.
I receive the ICPC newsletter in my email periodically and there was an article that was sent to me that really caught my attention:
https://internationalcbc.com/aurora-buying-medreleaf-in-biggest-cannabis-industry-deal-ever/
Folks, this is a big deal; like the biggest deal in cannabis history. I have been keeping an eye on Aurora Cannabis for a little while now and have been both impressed, and scared as hell, as to what they are doing in the cannabis space right now. It's impressive in the sense this purchase of MedLeaf at more than a billion bucks is a LOT of money! But then for this deal to come right after Aurora also purchased another company called CannaMed for nearly a billion bucks means there is something very exciting happening in cannabis. We haven't seen deals like this ever before.
What scares me about these big mergers and acquisitions is that's exactly what they are.
News like this clearly indicates that the "mom and pop" days of cannabis cultivation might just be heading for some tough terrain in the next few years.
I have participated in recreational cannabis in Oregon since its inception and for the first time I am actually seeing farms going out of business due to the insane drop in cannabis prices in the past year:
This graph speaks volumes about what is going on in the cannabis retail market right now:
I personally have friends who are hundreds of thousands of dollars in debt after taking some pretty big risks to get in on this cannabis game. They are now having to seriously consider selling all of their assets and cannabis inventory for pennies on the dollar. This is occurring in Oregon on a fairly big scale right now and I am concerned in the next year or so there will be a flood of big business- type folks who infiltrate Oregon and begin to merge and acquire these desperate farms.
This is nothing new, this is how capitalism works, and it's happening live and direct right in front of us.
In this way seeing a deal this large looks exciting at first. I think we all put ourselves into the shoes of those business folks making all that money but fail to sometimes understand the larger implications for small- time growers like myself or my buddy.
The most ironic thing of all to me is how this momentum is forcing many of us to consider doing something that is in so many ways sacrilegious to why we left the mainstream and got into this game to begin with: selling out.
But make no mistake, big cannabusiness is here and its here to stay. This deal is certainly a huge coup for the Aurora brand, but they aren't the only player in this market.
Canopy Growth Corporation is the biggest competitor to Aurora, and together both of these companies have the Canadian market cornered at a $6.5 billion market cap at this time. Folks, that's huge!
I imagine it's only a matter of time before this situation occurs here in the states. I have been predicting the price drop in Oregon since 2016 as I saw all of these licensed farms coming online. It was inevitable the market would be flooded and people would lose a lot of money.
When I left my prior career to join the cannabis industry a lot of my former co-workers kept telling me I was ditching them to go and make my fortune. I told them that was never my goal. My goal in cannabis has always been to legitimize cannabis, which meant stabilizing it and creating jobs that paid as equal (if not more) than other industries. My intent was to always help bring cannabis out of the shadows and into the mainstream.
Unfortunately part of that is realizing and understanding how business works. I have many, many friends who are small time growers who are disturbed by these trends of consolidation in Canada and what that means for Oregon cannabis cultivators. As an industry consultant and friend of the plant, the best advice I can offer small time farmers is to learn to "lean up" up their cultivation process and start slashing costs everywhere and anywhere they can find them. If that means letting a staff member or two being laid off, you better be prepared to make that decision because it is those kinds of hard decisions that are going to make or break us smaller cultivators in the next two years.
In the meantime stay strong my people!
That's it for today my friends. Thank you for checking out my content. Feel free to share with others if you would like, and give me a follow if you want to stay up to date on all things cannabis, including some new shots of my own personal stash once in a while!