Cannabis, Hemp & CBD

With the rapid change in state laws governing both recreational and medical cannabis, the inclusion of industrial hemp in the federal Farm Bill and the expanding range of products and companies legally utilizing CBD, there is an active marketplace in each sector for mergers and acquisitions, license sales, divestitures and sector roll-up plays.

At the start of 2020, cannabis had been fully legalized in 12 states, medical legalized and/or recreational use decriminalized in nearly 30 more and cannabis remains fully illegal in just 8 states. Among the early states for legalization where markets are maturing, there are seasoned, established businesses and assets whose owners are looking for the right exit opportunities, having built successful early stage businesses. In other states where licenses are complex and often limited, the market is competitive. In states who just recently legalized aspects of the cannabis industry, there is often vigorous competition for market share. In all of these states, larger companies, investment funds and other buyers need the competitive advantage of knowing what is available and on what terms before it becomes widely known. Sellers, often competing not just for their market share, but also for potential buyers, need to know who the buyers are, what terms they are open to and, as importantly, need to have a clear case to make for the value of their business. For buyers and sellers alike, they need to be prepared for the complexities of due diligence and deal structure, ready to respond to market conditions and balance aggressive action with thoroughness. TPGI Ventures can work with buyers and sellers across the full spectrum of corporate finance needs and transactions.

Hemp’s inclusion in the 2018 farm bill opens a broad array of opportunities for agricultural operations, processing and the wholesale and retail industrial hemp product markets. Although it is a variety of the same plant as marijuana (Cannabis sativa L.), industrial hemp has extremely low levels of delta-0 tetrahydrocannabinol (THC), the substance in marijuana that has psychoactive properties. Industrial hemp has been legalized in most European countries, Australia and Canada. Although not yet as active a market as cannabis, the federal inclusion of hemp in the farm bill has many optimistic about the crop’s future. Industrial hemp can be grown as fiber, seed or dual-purpose crop with a wide variety of industrial applications ranging from textiles, paper and composites to fabrics, yarns, paper, insulation and construction materials. Hemp seeds and cannabidiol also have a number of end uses including personal care, supplements and foods. Because of the high-yield and lower water usage of hemp products relative to some other crops, a number of proponents highlight the potential as a new crop for farmers across the U.S.

TPGI Ventures maintains an active presence and portfolio of work in the legal cannabis, hemp and CBD sector(s).