The year 2020 was a shock for all of us from both personal and business perspectives, but 2021 is shaping up to look much better, especially for Washington cannabis companies. In the past three months, I have had serious conversations with many clients and prospective clients regarding M&A activities. The pace of inquiries has accelerated significantly since early January.
Recently I wrote about Washington M&A activity (see here):
MSOs (multi-state operators) and international cannabis companies (especially Canadian public companies) are trying to buy and sell interests in WSLCB licensees. We can expect more of this in 2021 and more WSLCB resistance to MSOs and foreign funds investing in the Washington cannabis market.
Based on the term sheets we have been receiving and preparing, it is clear that retail licenses, which have always been in demand, continue to be the most desirable acquisition targets and command the best value. We have seen offers for bare retail licenses go as high as $1MM each, while groups of retail licenses with a consistent, solid retail brand go for many times that amount.
There is increasing interest in producer and processor licenses, as well, with bare licenses generally topping out around the mid-$400k