Entourage Effect Capital founder and managing director Matt Hawkins has some advice for cannabis operators.
“I would say to the small to mid-sized operators — no matter what sector you’re in — find other companies in your space and put your egos aside and join forces,” he told Elliot Lane and Javier Hasse on this last week’s Benzinga Cannabis Hour.
“Because, unfortunately for the past several years, we’ve had operators that have had very, very large egos and they won’t allow valuations to be reasonable when it comes to putting companies together. And that’s been the biggest impediment, in my opinion, on getting deals done in this sector.”
See the full clip below:
The incoming administration of President-elect Joe Biden, and all other political tailwinds, will lead toward inevitable quasi-legalization, Hawkins says.
“Sooner rather than later,” he says, adding that one out of three Americans live in an adult-use legalized state, while 50% live in a medicinal state.
An uptick in M&A activity should follow. And when that occurs, Entourage Effect has two goals:
- Help larger companies both public and private aggregate
- Help smaller companies figure out how to become ingrained with those companies.
“It’s all about…
