Cannabis M&A Activity: Key Deals and What They Signal

The Cannabis Merger and Acquisition (M&A) market contributes a significant share to the health of the broader U.S. economy. The cannabis M&A landscape is evolving continuously, from a low in 2008 to a post-COVID rebound, to regulatory shifts, election-year volatility, and changing consumer and dealmaker interest rates. With continuous evolution, operators are looking ahead to their next path, which is leading to mergers & acquisitions. 

Cannabis M&A poses serious challenges for both buyers and sellers, hindering them from expanding their relationship across the industry. Despite challenges in recent years, 2024 showed an upsurge in capital availability. Moreover, equity and debt capital flows in the cannabis business increased by 50% in 2023, with an average deal size of $ 20.4 million. Continue reading to understand the key deals in the cannabis M&A activity in late 2024 and early 2025.

Cannabis Mergers and Acquisitions (M&A) 2024-2025

According to the first quarter report of the cannabis industry and M&A 2025, significant growth is expected in the next 10 years in concentrates, hybrid strains, topicals, edibles, and other alternative cannabinoid products. Cannabis mergers & acquisitions activity is evolving in 2024 and 2025, with a focus on strategic, regional deals and a shift to traditional financing methods.  

In 2024, the cannabis industry experienced a significant decline in the mergers and acquisitions activity by value. However, the number of deals increased, indicating a shift towards smaller and more strategic transactions. Cannabis mergers and acquisitions (M&A) activity was valued $1.169 billion in 2024, a 33% decrease from $1.749 billion in 2023. For the year 2025, Q3 reports indicate that the volume of cannabis M&A is expected to remain low, with some high-value strategic acquisitions anticipated following cautious and selective deal-making.

Objectives of Cannabis M&A

There are three key objectives of the Cannabis M&A industry: technology, people, and capital. The regulatory landscape of cannabis demands technological innovation in customer relationship management and seed-to-sale tracking. Companies that comply with this trend can effectively advertise their competitive growth strategy to buyers. 

People or the management team are equally important as technology. If the management team is adept at reading the future signs and correctly interpreting the next 50 years, the company will be the first target of buyers. Lastly, raising capital is important. Cannabis companies need to be careful about what the raised investment can allow them to do. 

Key Deals of Cannabis M&A Activity

The key deals closed in the past few years focused on strategic acquisitions, creative deal structures (involving stocks, seller notes, earn-outs, & MSAs), distressed asset acquisitions, and pharmaceutical interests.  

1. Pfizer's acquisition of Arena Pharmaceuticals

Pfizer’s $6.7 billion acquisition of Arena Pharmaceuticals in 2021 highlighted its entrance into cannabinoid-type therapeutics. This indicates Big Pharma’s approval of cannabinoids as a viable treatment.  

2. Cresco Labs / Columbia Care (Terminated)

The merger between Cresco Labs and Columbia Care was announced in March 2022, with an initial value $2 billion to create one of the largest multi-state operators in the U.S. cannabis market. This merger was mutually terminated on July 31, 2023, due to the evolving industry landscape, challenges in asset divestitures, and the financial pressure of high debt on the combined companies.   

3. Trulieve / Harvest Health & Recreation

Trulieve Cannabis completed the acquisition of Harvest Health & Recreation at a deal value of $2.3 billion in 2021. This acquisition led to the formation of the largest and profitable operator in the U.S. cannabis market, positioning Trulieve as the leading medical and adult-use cannabis operator.

4. Tilray / Aphria

Tilray merged with Aphria at a deal value of $2.4 billion, which positioned Tilray as the global cannabis leader with a diverse portfolio. The combined company will operate under the name of ‘Tilray’ to create cannabis-focused consumer packaged goods (CPG). The new Tilray logo merges the legacy of Aphria and Tilray into a design that reflects the growing portfolio of the new company. 

5. Jazz Pharmaceuticals/GW Pharma

Jazz Pharmaceuticals completed the acquisition of GW Pharma in May 2021 for $7.2 billion in a cash-and-stock deal. This deal significantly expanded Jazz’s business into the cannabinoid medicine space, mainly with GW’s leading product, FDA-approved Epidiolex for epilepsy.  

6. Vireo Growth/Single-state Operator

Vireo Growth, a multi-state cannabis operator, recently acquired four single-state operators in all-stock transactions ($397 million) in late 2024 and early 2025. These four single-state operators were Deep Roots Harvest in Nevada, The Flowery in Florida, Proper Brands in Missouri, and WholesomeCo Cannabis in Utah. After this acquisition, the Vireo Growth expanded into seven states, with nearly 50 dispensaries. 

7. Blum/Three California Dispensaries

Blum Holdings has entered into various agreements in 2024 and 2025 to acquire three dispensaries in California as part of its strategic expansion. In February 2024, Blum announced a binding letter of intent (LOI) to acquire a portfolio of three retail stores in Sacramento for $9.7 million. Later in January 2025, Blum announced its intent to acquire another licensed retail store in Northern California for $1.8 million (in cash and stock). The company signed a binding agreement for $5 million in an all-stock deal. 

8. Planet 13/Enhale Brands

Planet 13 closed a deal in September 2024 to acquire the assets of an independent Las Vegas dispensary from Exhale Brands Nevada for $6.9 million, including the value of the inventory. 

What do these Deals Signal about the Future of the Cannabis Industry?

1. Market Rationalization and Consolidation

The cannabis industry is maturing, with ongoing consolidation of fragmented markets. Large, multiple-state operators are acquiring small, well-established single-state operators to increase market share and achieve economies of scale.

2. Regulatory Hope

The M&A activity in the cannabis industry is influenced by the regulatory changes, such as the SAFE Banking Act and rescheduling of cannabis to Schedule III substance. The rescheduling is a regulatory hope for companies that can alter the market landscape and encourage a new wave of deal-making. 

3. Profitability & Vertical Integration

Cannabis companies are involved in M&A activity to achieve vertical integration, enabling them to control the entire supply chain from cultivation to retail. Companies are looking for ‘accretive deals’ that enhance profitability and operational efficiency. 

4. Shift From Euphoria to Strategy

Earlier, cannabis M&A activity was influenced by the hype and the rush to acquire as many licenses as possible. The current M&A landscape is more selective and data-driven, with buyers focusing on proven business models and strong brand presence. 

Future Implications for Stakeholders

Future implications for stakeholders in Cannabis Mergers and Acquisitions focus on the market consolidation, regulatory changes, operational efficiency, and increased profitability.

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