| In the face of a turbulent market, widespread inflation, plummeting prices and long-term uncertainty, East Fork Cultivars and Peak Extracts, two craft cannabis companies, made the decision to merge in late 2022 to leverage each other’s strengths and navigate the challenging times successfully.
Mason Walker, co-owner and CEO of East Fork, will take the stage at Cannabis Conference (Aug. 15-17 | Las Vegas) to speak on the session: “The Untraditional M&A Deal: What You Can Learn From A Craft/Small Business Merger And How It Could Save Your Business,” where he will enlighten attendees on the intricacies of this merger and how M&A makes for a powerful tool for cannabis companies to effectively navigate an industry fraught with headwinds.
Here, Walker offers a preview of his dealmaking insight, which he hopes will ultimately help other small cannabis businesses feel comfortable with the process.
1. Cannabis Business Times: What are some factors that other businesses should consider when it comes to finding the right partner for this kind of merger?
Mason Walker: One thing that I’ve been thinking about in dealmaking in getting ready for a future deal [is] really assessing your needs and what problem you’re trying to solve, and then [it’s] identifying who in the marketplace is a good fit for that, as opposed to seeing what’s available and then trying to plug it in. It’s beneficial to be proactive with your strategy than reactive to potential opportunities, in a way.
2. CBT: What is one key lesson that you learned from this merger?
MW: I think my one main lesson I learned is to be even more conservative with timelines and with costs for dealmaking, even if the agreement is solid. I’m proud that the nonbinding term sheet that we came up with at the beginning and the actual executed legal definitive agreement changed very little in the real terms—almost not at all. We had a whole due diligence period with lawyers involved and the deal terms changed very little, so the foundation of the deal was really, really solid, but on the back end, all that integration work—regulatory approval, professional services, financial and administrative integration—just ended up taking longer and being more expensive than any of us imagined.
3. CBT: What is one thing you'd like attendees to take back to their business after attending your session this year?
MW: I think that so many folks in the cannabis industry have a strong vision for what they’re creating with their company, and a lot of people are in it for intrinsic reasons. They believe in the plant, or they believe in their team or their direction. I think the main thing I want people to take away is an openness to change before it’s needed. I think in retrospect, we really needed to change our company. I’m so glad that we made the deal when we did before it felt like we really needed to change. So, I think the main takeaway I want people to have is more comfortability and openness to dealmaking as a way to really shift and pivot before you’re trapped under duress or in a bad way. And I think the way that the market is right now for cannabis, M&A is a powerful tool [and] a strategic tool that companies should use to navigate an industry full of headwinds.
Join us this August to hear Walker and like-minded industry experts speak live on a variety of sessions that will help you navigate the current industry landscape and take your business to the next level.
REGISTER for this can’t-miss event before midnight June 7 to save up to $400 off your registration! |
