Glass House, Canopy, Curaleaf, Trulieve, Virginia And More

Look man, I’ve been watching cannabis stocks since before half these companies even existed, and this past week? Wild stuff. Absolutely wild. Markets were up overall but pot stocks? Bleeding red everywhere while deals were happening left and right.

The Big Money Moves Nobody Saw Coming

So Mercer Park Brand Acquisition Corp decides to scoop up Glass House Group for like 567 million dollars. Half a billion. For a California cannabis operator. The deal values Glass House at over a billion in equity which seems absolutely insane when you think about where this industry was just five years ago. Glass House has been building out their greenhouse operations in SoCal and apparently Mercer Park sees something the rest of us are missing cause they’re betting big.

Meanwhile Curaleaf went shopping in Europe. They grabbed EMMAC Life Sciences for $50 million cash plus 17.5 million in stock worth roughly $260 million total. Curaleaf has been on this tear trying to become the biggest cannabis company on the planet and expanding into Europe makes sense when you consider how fractured the American market still is. They also secured another $130 million in financing for Curaleaf International which tells me theyre not done spending.

Canopy Growth Playing Catch Up

Canopy Growth announced theyre buying The Supreme Cannabis Company for about CA$435 million. Thats after they already picked up Ace Valley like a week before. Canopy has been struggling honestly. Everyone knows it. Their stock has been a disaster for long term holders and they seem to be trying to buy their way back to relevance. Whether that works… I dunno man. Ive seen too many cannabis M&A deals that looked great on paper turn into nightmares.

Trulieve Doing Trulieve Things

Trulieve continues to just execute. They announced a public offering selling 5 million shares at C$50 per share expecting to raise roughly $198 million. The company also acquired three Pennsylvania dispensaries for $60 million in cash and stock. Kim Rivers knows what shes doing over there. Florida remains their bread and butter but they keep expanding methodically into new markets.

The Pennsylvania move is smart cause that market is still developing. Medical only for now but everyone expects adult use eventually. Getting in early before prices go crazy makes sense.

Virginia Changes Everything

Heres the big one though. Virginia became the first Southern state to legalize adult use cannabis. First in the whole South. Governor Northam pushed through changes to SB 1406 and HB 2312 that moved personal use legalization up to July 2021 instead of waiting until 2024. The commercial market will take longer to get rolling but the symbolic importance of a Southern state going legal cant be overstated.

This opens the door for other Southern states to follow. Maybe not immediately but politicians down there are watching. They see tax revenue from states like Colorado and Illinois and eventually the math becomes too compelling to ignore.

Other Deals Worth Mentioning

InterCure which operates as Canndoc is buying Better Holdings for $35 million. Fyllo raised $30 million in a Series B. Organigram bought The Edibles & Infusions Corp for $22 million. Green Thumb Industries got approved for financial incentives in Orange County New York to build a cultivation facility.

Illinois hit $100 million in monthly sales for the first time in March. Over 2.3 million items sold. The market keeps growing even as companies struggle with profitability.

What It All Means

The consolidation happening right now is intense. Big companies are getting bigger while smaller operators either get acquired or get crushed. The cultural acceptance keeps growing too – theres even museum exhibits about cannabis history popping up now. Capital still flows into cannabis but its becoming more selective. The days of throwing money at any company with a marijuana leaf in their logo are over.

Stocks being down while deals happen tells me theres a disconnect between public market sentiment and private market valuations. Buyers see value that public investors dont. Or maybe buyers are overpaying. Time will tell.

For retail investors this is confusing terrain. Do you buy the dip or wait for clearer signals? I genuinely dont know. What I do know is that legalization keeps advancing state by state and eventually something has to give at the federal level. When not if.

The cannabis industry remains one of the most frustrating and fascinating sectors to watch. Every week brings new drama new deals new disappointments. This week was no different.