The Talking Hedge

Now that the new year is here, cannabis industry executives can expect to face a crosscurrent of trends in 2022.   Some will be positive for the industry; others, negative. Some will be new; others, a continuation from 2021.   Summary:    Additional states will legalize marijuana in some form.    Calls will grow for greater participation among minorities in the cannabis industry.    Smaller M&A de...

There are many facets that influence sales trends within the cannabis industry. However, no question may be as alluring as: who is buying all this cannabis?     In this report, we’ll explore the proportional sales contributions of customer demographic groups over time and compare these trends across the US and Canada.     For example, sales to both Male and Female consumers have grown in the US, w...

Cannabis growers and manufacturers all across the country are looking for ways to increase efficiency, lower their cost of production and get their product in front of consumers faster. The Great Resignation may have increased the rate of automation as labor shortage have been wreaking havoc on a wide variety of industries, creating the desire to reduce the amount of manual labor within any operat...

Retail prices for Canadian recreational cannabis products fell across the board in 2021, as retailers and producers sold them for less to entice price-sensitive consumers and capture market share. Prices declined for every Canadian cannabis product category during the third full year of Canada’s evolving adult-use marijuana market. Canadian cannabis industry insiders say some level of continued pr...

While the number of businesses that have failed is relatively small, many more failures are coming. Summary: Limited License States Population Matters  Adjoining States  People Make or Break It 3 Skillsets You Need  The "But I’m Not a Stoner" Bias  An Overpaid C-suite  Let's use Flow Cannabis recent failures as a learning example; By vowing to help underground cannabis farmers in the Emerald Trian...

Practice doesn't make perfect, failure does.     Ten years after Washington voters approved one of the nation’s first recreational marijuana programs, the state’s cannabis industry has become among the country’s largest, with annual sales of roughly $1.5 billion and more than 11,000 employees.   Yet as Washington state marks the 10-year milestone, industry executives and advocates say reforms are...

Portugal has long been ahead of other European countries in its understanding and stance on drug reform. Culturally, the Portuguese look favorably on herbal rather than pharmaceutical solutions presented by Big Pharma.  Saint Vincent and the Grenadines, a Caribbean nation with a population of just over 110,000 people, exported 110 pounds of cannabis to Germany, making it the first Eastern Caribbea...

The cannabis industry has come a long way since the beginning of the year. Here’s a recap of the top seven stories that defined the year for cannabis users in 2021.   With an ongoing pandemic, a new president and Congress and five new state cannabis markets worth a collective $5 billion, 2021 has been a year like no other for the cannabis industry.   From full cannabis legalization in New York to...

The cannabis industry has come a long way since the beginning of the year. Here’s a recap of the top seven stories that defined the year for cannabis users in 2021.   With an ongoing pandemic, a new president and Congress and five new state cannabis markets worth a collective $5 billion, 2021 has been a year like no other for the cannabis industry.   From full cannabis legalization in New York to...

Are any public cannabis companies potential Leveraged Buyout (LBO) or Recap candidates? The recently announced Curaleaf (OTCQX: CURLF) acquisition of Bloom can be considered an LBO. The acquisition, valued at 8x 2021 EBITDA, included 6x EBITDA in seller notes as consideration. Neither Curaleaf nor its subsidiaries will guarantee the debt, which will only be by recourse to the equity and assets of...

Summary: E-commerce & Future of Retail Compliance in cannabis Safe Banking's impact Revenue model & exciting new markets M&A activity SPAC / IPO (NASDAQ: MAPS) Cannabis stocks & Federal legalization Stock Buybacks Crystal Ball Predictions   WM Technology (NASDAQ: MAPS) signature consumer-facing platform, provides consumers with information regarding cannabis products, including online ordering, lo...

The volume of cannabis capital raised in the first two weeks of 2022 has been significantly lower than in any comparable period going back to 2018.   The average deal size was $7.0 million vs. $70.4 million in the same week last year. Three equity deals totaling $492M by AYR, Columbia Care, and Curaleaf skewed last year's totals.   The valuation gap between the most prominent companies and everyon...

Analysts have slashed hundreds of millions of dollars off their 2022 sales forecasts for three Canadian cannabis producers, reflecting an increasingly competitive landscape across the adult-use industry, falling overall prices and poor execution by some executive teams.   The BAD ETF (BAD) debuted on Wednesday to target an index focused on gambling, alcohol and cannabis stocks.   The ETF will trac...

Cannabis sales surged in January after falling four consecutive months across all 15 markets Headset currently tracks, with 2021 sales totaling $1.84 BILLION.   California is the December sales leader with $442.7M. Year-over-year sales growth continues its single-digit trend with many states experiencing negative YOY sales growth.   Decreased average basket size trend continues, while the number o...

MJBiz has been acquired by Emerald X (NASDAQ: EEX) for $120 million in cash plus potential earnouts.   The transaction reflects the ongoing mainstream acceptance of the once-counterculture cannabis plant – and the multibillion-dollar industry that has blossomed around it over the past quarter century.   The deal includes a variable earnout based on financial performance. In 2021, MJBiz’s revenues...

SPACS have been a significant part of the cannabis landscape since the late 2017 IPO of Cannabis Strategies Acquisition Corp, now AYR Wellness.     Twenty-three Cannabis SPAC IPOs have been completed for total proceeds of $4.24B:   Of these, 5 SPACs with original IPO proceeds of $920M acquired non-cannabis businesses ranging from Wine to Space.     Eight representing initial IPO proceeds of $1.72B...

Chatting with George Jage, CEO, Jage Media Inc. about crystal ball predictions within the Cannabis Industry and 2022 being the year of the brand.   Summary: * George talks about retailers historically owning the relationship with the consumer based on limited shelf space and significant category duplicity.   * Expanding distribution capabilities, more significant investment into brand marketing an...

Pfizer entered the medical cannabis industry betting on a promising cannabinoid-based bowel disease treatment, signing an agreement with the clinical-stage company Arena Pharmaceuticals for a total equity value of around $6.7 billion in an all-cash transaction. The interest of cannabis’ many benefits from the global pharmaceutical industry, known as #BigPharma, will radically transform the cannabi...

There’s been a significant shift in cannabis debt issuance, transitioning from equity-linked debt to straight debt. This shift reflects the industry's growing maturity and profitability (at least in the U.S.)   In early 2018, nearly all cannabis debt issues were convertibles, and many issues had additional attached warrants to achieve total coverages of over 100%.     As the U.S. MSOs became EBITD...

Ontario is one of the most exciting cannabis markets to watch as it expands with new retailers, brands, and products.     In Headset’s report, we will explore trends and behaviors of cannabis consumers in Ontario by analyzing different age groups and identifying growth and changes in spending habits of different cannabis categories year over year.   When we look at age groups in Ontario, we notice...

the opportunities presented in the United States #cannabis market have been consistently increasing year over year since the inaugural states of Colorado and Washington voted in 2013 for #legalization.     Despite the piecemeal approach we have seen in new states approving and implementing adult-use cannabis markets, we are seeing synergies within regional approaches and established operators impr...

Canadian Cannabis Recap   While national regulations remain restrictive, including limitations such as permitting a maximum of 10 milligrams of THC in drinks and edibles, provinces across the country have licensed more retailers and loosened certain regulations, opening regions such as Ontario for strong growth.   According to the governmental statistics agency StatsCan, spending on regulated adul...

Since 2019, capital raises in the cannabis industry have totaled $25B reflecting investment in more diverse and innovative products, improved therapeutic outcomes, and ancillary services.     New Frontier Data’s report on Cannabis Finance & Investment, uncovers emerging trends, challenges and opportunities as they relate to Federal Prohibition, Capital Risks, M&A Investment Trends and Global Expan...

The convenience of prerolls is so irresistible to many cannabis consumers that preroll sales grew 46% last year.     The growth in pre-roll sales even outpaced the already explosive cannabis market, which grew by only 54.2% over the same period.     Infused prerolls have risen from 12.7% of all pre-roll sales in 2018 to 31.9% of all pre-roll sales in 2021.   Another trend is that consumers are buy...

Santa didn't deliver the Safe Banking Act, but New Mexico has the first financial institution in the country to become certified for outstanding U.S. monetary banking protocols in banking cannabis and hemp operation.   They'll ensure records are thorough, easily navigated, and readily available to fulfill law enforcement demands such as subpoenas and inquiries (for your protection, of course).   A...