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Fueled by penny stocks, public companies are buying Coachella Valley weed businesses

Public companies are trying to plant flags in the Coachella Valley cannabis business by buying early-stage weed shops.

The Desert Sun tracked four companies – each with shares listed on public exchanges – that have either announced they’re in due diligence to acquire a local cannabis business or have already completed an acquisition.

The companies involved in this flurry of acquisition activity have some qualities in common. On the selling side, local businesses that have put themselves up for sale said they’re interested in being acquired as a way to get growth capital for their ventures, or as a means to exit the cannabis market entirely. They said it can be difficult to raise money in an industry locked out of traditional banking and wondered if they could continue to compete with larger businesses entering the pot business.

And on the buying side, the four companies seeking to acquire local cannabis startups tend to be early-stage companies or companies entering the cannabis industry for the first time themselves. Many are seeking to operate in more than one state, have stocks that trade for less than a dollar and are based out of offices in Canada.

Greta Carter, the CEO of Highroad Consulting in Desert Hot Springs, said her firm fields calls every day from investors trying to dip their toes into cannabis deals for the first time.

“People are wanting a piece of the action,” she said.

To Read The Rest Of This Article By Amy DiPierro on Desert Sun

Published: February 26, 2019

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