Cam Battley, a senior executive at Aurora Cannabis, quipped in a recent note to company colleagues that “we need to accelerate” mergers and acquisitions activity, because “we haven’t acquired any other companies in several hours.”
Aurora has been snatching up firms — including two deals announced the same day last week, and a hostile takeover bid launched a day later — in an effort to become a fully integrated, “globally dominant” player in production and retail.
Amid analyst predictions that consolidation in the Canadian cannabis sector will leave production in the hands of a few large players, Edmonton-based Aurora is in growth mode, having amassed an estimated $340 million in cash from investors.
While Battley said his company is “unabashedly” pursuing its quest for dominance, the executive vice-president said he believes there will be room for companies of all sizes, including smaller, craft-style growers.
“We’re not snapping up everybody,” he said.
New data shows consolidation in the cannabis sector is heating up. As of Friday, private and publicly traded pot companies in Canada have been involved in 75 mergers and acquisitions so far this year, compared to 33 in all of 2016, according to the New York-based cannabis advisory firm Viridian Capital Advisors.
The Canadian deals accounted for a little more than half of all mergers and acquisitions Viridian tracked around the world, mainly in North America, in 2017.
Stock markets have placed high valuations on Canadian cannabis firms leading up to legalization in July, with Aurora’s share price more than doubling in the past year.
This has allowed a few larger producers to amass “a huge amount of cash” to buy smaller competitors, said Troy Dayton, chief executive of the marijuana research and investment firm Arcview Group.