Consolidation within the cannabis industry

As the government prepares for legalization of recreational marijuana this summer, Canada’s cannabis producers and distributors are bracing themselves for a period of consolidation leading up to and following legalization. A recent report published by Ernst&Young (EY) provides insight into the current state of Canada’s cannabis industry. EY surveyed 11 licensed producers and found that many of those surveyed believe that consolidation in the cannabis industry is inevitable due to the high barriers for new players. Two of the biggest hurdles cannabis producers and distributors face is difficulty obtaining financing from banks and the slow speed at which the government gives out new licenses. There are currently 79 licensed producers in Canada which offer opportunity for those wishing to enter the market to do so via an acquisition of an already licensed producer. As demand will increase post legalization, these relatively small producers may encounter difficulty…

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