Mergers and acquisitions: Canada challenges stateside competition

Marijuana production companies are teaming up to keep ahead of their competitors. Canada has seen numerous mergers and acquisitions deals since the legalization of cannabis this past Oct. 17. Producers are especially keeping and eye on their U.S. competition, but it's too soon to tell who's winning the race. As of the end of November, however, Canada is in the lead.

There are three giant players in Canada's cannabis industry: Aurora Cannabis, Aphira and Canopy Growth. There are some big players stateside as well. In fact, if it wasn't for Canada's jump start in the industry, American companies could have had the edge. For instance MedMen, an American company, had the biggest year-over-year growth compared to the other heavy hitters in production market.

Where Canadian producers may run into problems is branding and marketing since Canadian legislation laws limit what they can do. Because of this, it may be difficult for companies to develop a relationship with their consumers. For American companies, on the other hand, the restrictions aren't as stringent in those states that have legalized cannabis. So far, the U.S. federal government has no plans to legalize marijuana, and that is actually good news in terms of taxation for American producers. 

Mergers and acquisitions is an interesting, albeit complex, sector of business in Canada. Understanding the dynamics may be confusing, so getting a lawyer's input may clarify some of the perplexing issues that surround it. For those thinking about expanding or cutting their businesses, a mergers and acquisitions lawyer may be able to offer prudent advice and direction.  

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