The burgeoning cannabis industry, rife with mergers these days, is adding another to the list.
Four businesses agreed to join forces as TILT Holdings, which will have a market capitalization of more than $500 million and plans to trade on the Canadian Securities Exchange, the company said Tuesday.
The merger focuses on bundling services — from software to development of indoor cultivation, rather than amassing marijuana volume, according to CEO Alex Coleman.
Pot M&A is front of mind for many after Aurora Cannabis agreed to buy Canadian rival MedReleaf Monday in the largest pot deal to date.
The combined producer will have the capacity to grow 1.26 million pounds of marijuana a year across two countries.
TILT is taking a distinct path. Rolling together different parts of the business means the company will be prepared to serve interest from new brands as well as existing consumer-packaged-goods giants who want to gain entry into the space, he said.
The four entities that are merging are Baker Technologies, a software company; Briteside, a developer of products including modular cultivation units; Sea Hunter, an investment and management firm for the industry; and Sante Veritas Holdings, a planned Canadian cannabis producer working to obtain a license. The merged company expects to establish operations in every state where cannabis laws exist, it said in a statement.
The cannabis industry in the United States alone is expected to reach $75 billion by 2030, according to investment bank Cowen and Co.