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ARTICLE · 21 JANUARY 2021

A Slow Burn: The Cannabis Sector May Be Ready For Market Consolidation

The first half of 2020 saw a significant decline in M&A activity as capital markets were impacted by the COVID-19 pandemic...

CanadaCannabis & Hemp

The first half of 2020 saw a significant decline in M&A activity as capital markets were impacted by the COVID-19 pandemic, but the second half of the year saw a  surge in M&A activity that is expected to continue into 2021. One industry that may be particularly well primed for M&A activity in 2021 is the cannabis industry, where market consolidation is already underway.

Predictions of market consolidation in the cannabis industry are hardly novel. Even prior to the legalization of cannabis in Canada,  research by Ernst & Young indicated that industry executives believed that consolidation was inevitable and would leave only a few large players to operate in the post-legalization cannabis market. However, though a number of M&A transactions have been completed in the cannabis sector, the industry has not yet experienced the high volume of transactions that many predicted.

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