Industries Served

Cannabis

Beacon has successfully advised multiple businesses in cannabis and sub-industries.

  • Cannabis cultivators
  • Cannabis oil producers
  • Pharmaceutical and drug manufacturers
  • Cannabis paraphernalia stores
  • Hospitals and therapy centers
  • Pharmacies and drug stores
  • Government-controlled dispensaries
  • Alcohol and beverage manufacturers and distributors

Beacon has experience working with professionals in the cannabis and related sub-industries.

Implementation

Beacon began by carefully assessing the medical and recreational cannabis industry in Canada. We assessed the macroeconomic and regulatory environment impacting the cannabis space. Our client had agile relationships with several suppliers, cultivators and experienced professionals in the cannabis space. In addition, the business’ reputational goodwill effectively positioned it to become one of Canada’s largest independent cannabis retailers post-legalization. Beacon realized the business’ growth potential and factored this growth into our valuation assumptions. Throughout the valuation process, we were closely involved with our clients and made sure we developed a deep understanding of the business and its operations.

Industry Overview

This industry includes all licensed producers, wholesalers, distributors and retailers of cannabis, drugs and products containing cannabis, and cannabis-related paraphernalia, operating under Health Canada’s regulations. The cannabis industry is a new and emerging industry and has seen a lot of activity since Canada legalized marijuana in 2018. Suppliers for cannabis cultivators and producers include fertilizer and pesticide companies, lighting, bulb and appliance manufacturing companies. Suppliers have little power in the industry and are used by cultivators to produce in bulk. The current market is still developing, and currently, end users range from recreational customers to medical patients. As more applications of cannabis evolve, this will give rise to more sub-industries, and consequently, high M&A volume due to the potential for vertical and horizontal integration. The industry is highly opportunistic and is currently in its growth stage. In Canada, Canopy Growth Corp, Aphria and Aurora are the largest players with many smaller players emerging. Despite heavy regulations, we are seeing a number of new entrants which further indicates the untapped potential of this industry. For this reason, middle market advisory firms have been focusing their attention on this industry as well. The industry is primarily driven by per capita disposable income and health expenditure. Over the last decade, there has also been an exponential increase in mental health issues like anxiety and depression, which cannabis has been proven to help treat. In addition, government regulation and changing social attitudes towards cannabis will further fuel demand and generate tailwinds going forward.
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