For cannabis adviser Evan Eneman, CEO of MGO-ELLO Alliance, this result is to be expected ‘at this point in time’.
“I think Canopy is playing the long game and we can see that in their aggressive growth prospects,” Eneman said on Yahoo Finance’s “ The Ticker .”
The market size and reach is key to the strategy behind Canopy’s Acreage deal, and Eneman sees it as critical not only for their expansion, but for other Canadian cannabis businesses as well.
“It’s an interesting outlook because Canada as a market itself is around the size of California in population but certainly smaller in size for consumption. So looking at the U.S. for expansion is critical,” he said. “So this strategy for Canopy in the Acreage deal, we’re going to see that for others.”
Shareholders from both companies would agree with Eneman after they voted overwhelmingly to approve the $3.4 billion acquisition plan.
Cannabis investments skyrockets
New York state approved a bill to decriminalize marijuana but falls short on legalization. Despite uncertainty over the outlook of cannabis becoming legal on the federal level, investors’ optimism has not dampened.
In fact, only in the first half of 2019, private investments in cannabis firms skyrocketed past $1.3 billion, according to MGO-ELLO and Pitchbook data. This compared to $1 billion for the whole year of 2018. Eneman expects even more to come.
“We’re going to see that investment accelerate throughout the U.S. market at the very least, as well as internationally,” he said.
According to MGO-ELLO’s Cannabis Private Investment Review , they’re expecting banking access to be resolved and an expansion of cannabis products into various industry segments including “pharma, health & wellness, beverages, CPG and similar groupings.”
A wide-range of cannabis products are already on the shelves in several U.S. states including edibles and beverages. Eneman believes diversification helps brands find new ground.
“In the U.S. we already see that, we see the shift from flower to edibles quite extensively in most significant markets like California and others who have adult use programs already,” he said. “That’ll be a huge driver as brands accelerate into new segments, or Canopy and other operators.”
But the inevitable question of nation-wide legalization continue to loom.
“There’s cautious optimism that legalization is moving forward, and in so you see the investment dollar flow ahead of those regulatory changes,” he said.
Grete Suarez is producer at Yahoo Finance for YFi PM and The Ticker. Follow her on Twitter : @GreteSuarez
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