It often feels as though years working in the cannabis industry are like “dog years,” since so much has happened in such a comparably short period of time. It was barely 2 1/2 years ago, after all, on Aug. 15, 2018, that Constellation Brands, Inc., the Fortune 500 beer, wine and spirits company, announced that it had agreed to invest $5 billion CAD (approximately USD $4 billion) in Canopy Growth Corp. kicking off a euphoric period of cannabis transactions. A few weeks later in October 2018, MedMen Enterprises announced its agreement to purchase PharmaCann at a $682.0 million valuation, by far the largest acquisition to date of a U.S.-based cannabis company. Announcements of other significant transaction agreements quickly followed, including the public listings of several large U.S.-based MSOs (multistate operators) on the Canadian Securities Exchange (CSE) and Altria’s USD $1.8 billion investment in Cronos in December 2018. In April 2019, a number of record-breaking M&A deals were announced in rapid succession, including Cresco’s USD $823.5 million acquisition of Origin House, Harvest’s planned USD $850 million acquisition of Verano, Curaleaf’s USD $948.8 million acquisition of Cura Partners, and Acreage’s plan of arrangement with Canopy giving Canopy the option (and the requirement upon federal cannabis legalization) to purchase Acreage in a transaction then valued at $3.4 billion.

The frenzy waned, however, as cannabis stocks began a steep decline in May 2019. The New Cannabis Ventures American Cannabis Operators Index, which launched in October 2018 with a value of 100, was trading at 119.53 in early April 2019 before selling off over the balance of 2019 and ending the year below 40. Several announced mergers including MedMen/PharmaCann and Harvest/Verano were terminated, while others including Cresco/Origin House and Curaleaf/Cura Partners were closed on revised terms. The Canopy/Acreage transaction was also reportedly revised to reduce the valuation. Cannabis equities continued to slide into 2020, and the American Cannabis Operators Index dipped as low as 14.50 on March 18, 2020, before starting to rebound.

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