21.5 million residents, >$1b in medical cannabis sales, and a limited number of licenses make Florida an attractive state for any MSO not already in the market. After a $120m all-stock false start with Florida company VidaCann in 2019, Cresco is back in a $213m all-stock acquisition of its competitor Bluma Wellness.
2020 was a year like no other, especially for the cannabis industry. Unexpectedly, cannabis’ main traditional “holiday” 4/20 did not even come out in the top 10 highest grossing days for cannabis sales in the year. Instead, national holidays and extended weekends were the blockbuster sales days, potentially because cannabis is a much more potent performance enhancer in dealing with holiday lockdowns than in mixed martial arts (see UFC note below).
SPACs are unique public vehicles that are effectively publicly traded cash looking to buy something within 24 months, and usually some sweeteners thrown in for the management team that put the SPAC together. A currently favored vehicle in public markets generally, cannabis SPACs are poised to be a potentially significant player in 2021 with a collective $2.5b in capital that must be deployed before the end of next year. Most cannabis SPACs intend to trade on NASDAQ, and so therefore can’t “touch the plant.”
A testament to the momentum that cannabis has gained in the sports arena (where NFL, NBA, MLB, NHL have decreased or removed marijuana usage penalties), popular mixed martial arts promotion the Ultimate Fighting Championship (UFC) is no longer testing for cannabis outside of day-of screenings to determine whether or not the substance is being used as a performance enhancing drug during the bout itself. In fairness, based on our extensive research, we at Bengal were always skeptical of the performance enhancing benefits of cannabis in the pummeling of others.