The amount of capital raised during the past two months is a strong signal that the cannabis sector is prepping for more acquisitions in 2021 as more states have legalized the adult use of marijuana.
“We’ve already seen a number of deals conducted in late 2020,” says Timothy Seymour, founder of Seymour Asset Management in New York and portfolio manager of the Amplify Seymour Cannabis ETF (ticker: CNBS), whose top three holdings are GW Pharmaceuticals (GWPH) at 10.7%, Aphria (APHA) at 8.6% and Canopy Growth Corp. (CGC) at 8.6%.
The larger multistate operators have raised money and are on a land grab before the sector opens up to larger strategics and institutional capital, he says, and the level of deal flow will rise during the next three to six months.
“The cannabis industry is already a $50 billion industry and this should triple by the end of the decade,” says Seymour, whose exchange-traded fund CNBS generated a return of 60% year to date and 137% for the past six months. “We are talking about recreational, medical, wellness, lifestyle and consumer packaged goods all rolled up into one massive growth opportunity.”