Pot M&A: Stock Posts Massive Gap Up
Down here in my home state of Florida, I meet a lot of different people from a lot of different walks of life.
It probably doesn’t surprise you that I also meet a lot of transplants. And more and more often when I speak to these carpetbaggers, I find the reason they moved down south is NOT because we don’t have a state income tax.
It’s because they want to get in the cannabis biz.
And since Florida is one of the most active licensers of cannabis operations in the U.S., it only makes sense that this shift is occurring.
And I see dollars signs, too… Lots of them. Here’s why.
How Good Is Your Vertical?
No, I’m not scouting basketball. I’m talking about the hypothetical question every cannabis executive is asking themselves behind closed doors in boardrooms from Florida to Quebec.
If you followed my alerts this year, you now know that merger-and-acquisition action in the cannabis sector is at an all-time high.
But not all M&As are created equal. The most important deals are vertical acquisitions.
A vertical acquisition is when one company acquires another company that represents a different step in the production process or supply chain. This would be like a cannabis flower producer acquiring a company that manages storefronts and branding.
It’s also the fastest way to grow your company’s footprint in the space.
The Competition Is Heating Up
There are a lot of cannabis companies out there today. A lot more than there were a few years ago.
And CEOs across the cannabis landscape are realizing that diverse revenue streams fueled by having multiple positions in the cannabis supply chains are crucial to surviving as the market slowly matures and consolidates.
That’s why we are seeing a massive uptick this year in capital raises and merger activity.
Source: Viridian Capital Advisors, Marijuana Business Daily
Big Move Spurs Flash Gap up for Curaleaf Holdings
This one is happening so fast today we may see a brief halt to trading.
Long story short, Curaleaf Holdings (OTC: CURLF) is breaking out in a big way this morning as news broke premarket about a new M&A deal. In a deal valued at $875 million, Curaleaf will acquire the largest vertically integrated, privately owned multistate cannabis firm in the U.S., Grassroots Cannabis.
According to Curaleaf’s press release this morning:
“This transaction solidifies Curaleaf’s position as the world’s largest cannabis company by revenue and the largest in the U.S. across key operating metrics.”
The press release further notes that “Grassroots has a portfolio of 61 dispensary licenses, with 20 operating today, and 17 cultivation and processing licenses that will substantially accelerate Curaleaf’s continued expansion across the nation.”
This also grows Curaleaf’s footprint, bumping their presence up from 12 to 19 states as they manage a portfolio of 131 dispensary licenses, 68 operational locations, 20 cultivation sites and 26 processing facilities, as per the press release.
This stock is flying high today, up almost 15% as I’m writing:
I think this is one of those rare moments when 15% gains are just the beginning for the U.S.’s new largest publicly traded cannabis company.
I’d expect to see almost twice the volume of movement into CURLF today as I’m seeing, suggesting many folks are not yet privy to this groundbreaking news.
If this story intrigues you like it does me, move fast.
And for more explosive gainers like CURLF, click here right now!
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