Cannabis M&A is Quiet and Creditor Led Nowadays

By Shawn Collins of the THC Group. For more insights, check out his Policy, Decoded newsletter.

What Happened: Javier Hasse wrote in Forbes what a lot of people are seeing right now: deals are still getting done, just behind the scenes. Public MSO combinations remain limited because valuations are weak, cash is scarce, and sellers hesitate to accept stock as full payment. Meanwhile, consolidation is moving through private transactions, distressed asset sales, note purchases, and lender-driven restructurings that don’t need a public announcement (but still may require regulator approval!). A lot of debt comes due through 2026, and that reality is forcing operators into refinance talks or sale processes on someone else’s timetable. Bankruptcy is a limited tool here. In practice, distress gets handled through receiverships and secured-creditor remedies, and that tends to compress the timeline.

Why It Matters: This round of consolidation is being driven by balance sheets and creditor terms. Viridian’s deal data and the broader transaction record point to a market where cash consideration has largely dried up, so control moves through structures that preserve cash and price risk into terms. Earnouts, rollovers, seller notes, and credit bids start taking the place of cash, and covenants get progressively tighter. Schedule III expectations and 280E relief may improve cash flow and underwriting, but they do not refill the equity market on demand, and they do not solve refinancing for businesses that are already structurally unprofitable. The practical divide is between operators who can finance and integrate in a regulatory-compliant way and operators who are running out of runway. That divide plays out differently in each state, too. Open-license markets generate more forced exits and price-setting distressed sales, while limited-license markets hold value better and attract buyers with the patience and capital to build through the cycle.

THC Group Take: The next wave of consolidation is going to be decided by deadlines. If you have debt coming due and no clean refinance path, you are not really choosing your options anymore. The lender is. That is not moral judgment. It is just how leverage works when cash is tight.

If you are looking to buy, do not romanticize distress. You are stepping into someone else’s operating reality, with real people, real compliance habits, and a regulator who has seen every clever workaround already. The good deals in this market will be the ones where the handoff stays calm: governance is clean, the municipality plays along, payroll and vendors do not get spooked, and nobody gets too cute or clever about control while approvals are pending.

If you are looking to sell or raise money, act earlier than you want to. The difference between starting a process now and starting it after you miss something is night and day. One version lets you protect the business you built and the people who kept it running. The other version turns into a creditor process with fewer choices and more bruises. At least to your ego, and possibly worse.

Schedule III might help the math, but only when the 280E pressure eases. If you’re in this situation, though, do you really think now is the time to roll dice? Schedule III will not hand you a pile of fresh capital on Monday morning. The winners over the next year are going to be the boring ones: clean books, defensible tax positions, and enough runway to make decisions instead of taking orders.

This article is from an external, unpaid contributor. It does not represent IgniteIt’s reporting and has not been edited for content or accuracy. 

Photo by Kristina Flour on Unsplash