merged to form the largest pot company in Canada by revenue, Quebec company Hexo Corp.
“I don’t think any of these companies have solved the puzzle yet of how to build and maintain market share,” said Aaron Salz, principal and founder of Toronto-based Stoic Advisory Inc., a boutique investment firm focused primarily on cannabis deals.
The company generated $131-million in revenue for the three months ending September, 2021, compared with $136-million for the quarter prior, $148-million for the quarter ending March 31, 2021, and $152-million in the three months ending December, 2020.
Canopy acquired Ace Valley in April for $51.8-million, saying at the time that Ace Valley had carved out a “leading position” among millennial and Gen-Z consumers and would “unlock revenue growth opportunities.” The Toronto-based craft cannabis brand sells prerolled cannabis, vape pens and cannabis gummies – product lines that Canopy also sells through its Tweed brand.
Canopy paid $435-million to buy Supreme, particularly because of its craft cannabis brand 7ACRES, which it said in a news release at the time had a “loyal” customer following.
Hexo acquired 48North, a wellness-focused cannabis brand, for about $50-million in September, but barely eight weeks later announced it would shut down 48North’s facilities , leaving hundreds of workers without jobs.
Mr. Chalabi told The Globe and Mail it is not uncommon for larger licensed producers to acquire smaller ones and then shut down their growing facilities if they aren’t essential to the brand to consolidate production in fewer locations.
It has more than 1,600 unique products in different forms , according to data from the Ontario Cannabis Store.
“Around 40 per cent of the market are smaller producers,” Mr. Salz said.
“That was a tactical acquisition for us, and we were able to build a significant position in that market segment,” she said.
When asked if Organigram will join the acquisition spree to attempt to cement market share in the hyper-competitive cannabis market, Ms. Goldenberg said the ideal type of acquisition is filling a segment gap or a regional gap that will drive true incremental value.