Spreading Legalization And Investor Appetite Could Ignite Cannabis M&A – Forbes

By Nate Trela, with analytics by Aram Hovsepian

Even after a drug bust at his brewery in 2005 threatened his company, Lagunitas Brewing founder and CEO Tom Magee has proudly proclaimed his fondness for cannabis as a consumer.

He’s also a fan as a businessman. Lagunitas introduced a beer inspired by the event, Undercover Investigation Shut-Down Ale, and followed that up last year with cannabis-infused ale, SuperCritical, that was flavored by the fragrant oils from cannabis.

Supercritical lacks THC, the chemical that causes the euphoric high associated with marijuana, but Magee said it’s not hard to envision a future where “the molecule” can be found easily in broadly sold beverages, edibles and even consumer goods such as wallpaper and air freshener. He believes the only thing slowing the push of global brands into the marijuana space as consolidators is that it remains illegal in the U.S. under federal law, but “anyone who believes in this industry believes a 50-state solution is coming.”


A cannabis plant.

And that solution will bring a wave of business consolidation, he said.

“Like any industry, I think being caught in the middle is a very dangerous place to be,” Magee said after his keynote talk earlier this month at the National Cannabis Industry Association Conference in Denver. “You can be small and artisanal … or you have to be a big player who can deliver on volume and the right margins.”

As it stands now, spreading legalization, maturing companies and growing investor appetites could spark up a flurry of M&A and capital raising for the cannabis industry in the coming years, according to industry executives and investors. The fact it remains federally illegal has mellowed deal-making, but there are already signs of a breakthrough.

The dollars have

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