Virtual General Counsel LLC
Virtual General Counsel LLC

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Corporate acquisitions hit the cannabis industry

| Dec 5, 2019 | Mergers & Acquisitions |

As Colorado’s legalized cannabis industry grows, large corporations are taking notice.

Starting November 1, publicly traded companies could legally invest in our state’s cannabis businesses, and within days one of Colorado’s biggest cannabis dispensary chains announced it had been sold. Canada’s Columbia Care, Inc., acquired Colorado’s Green Solution for a reported $140 million.

For longtime cannabis users and market observers, the news seems strange. Before cannabis was legal, sales were, by necessity, almost always conducted at a small scale. But with legalization came all the trappings of modern business. Now, what was once a purely local industry is becoming part of a global system. Market analysts expect more mergers and acquisitions in the months and years ahead. Just as Colorado’s craft beer industry has consolidated in recent years, the cannabis industry may soon be dominated by large players and multinational corporations.

In the face of industry consolidation and capital investment, it can be hard for smaller businesses to compete. That’s true of the legal cannabis industry as well as any other type of business.

To protect their business and their own personal finances, owners, entrepreneurs, investors and others need careful legal planning and advice. A skilled business attorney can help from almost the very beginning by working with clients to choose the right business structure during the business formation stage. An attorney can also help with contracts and strategic planning. And, if one day this business is read to merge with another business, acquire another business, or sell to another business, an experienced attorney can help business owners to negotiate better deals and make better transactions.