Although the federal government seems to have turned a blind eye to the legalization of the medical and even recreational use of cannabis in certain states, they have not relinquished their duty to maintain competitive markets in the U.S. Over the past year, the Federal Trade Commission (“FTC”) and the Department of Justice (“DOJ”) have used their powers under the Hart-Scott-Rodino (“HSR”) Antitrust Improvements Act of 1976 (the “HSR Act”) to investigate mergers and acquisitions in the cannabis market, even though the operations of such business are essentially illegal under federal law.
Continue Reading Holding Up the Green: Hart-Scott-Rodino and its Impact on Cannabis M&A Transactions

A developing market for owners of cannabis businesses looking for a potential buyer are SPACs, special purpose acquisition companies.  SPACs raise money in public offerings with the purpose of acquiring companies, usually in a specified range of industries or located in a particular geographic area. The SPACs cannot have a particular target in mind at the time of the public offering.  Among some of the more recent SPACs with a cannabis industry focus, MTech Acquisition Corp. closed a public offering for $57.5 million in February 2018, and Cannabis Strategies Acquisition Corp. closed a CDN $134.75 million (approximately US $103.78 million) public offering in Canada in December 2017. This post looks at some of the issues involved that are unique to being acquired by a SPAC.
Continue Reading SPACs as an Exit Strategy for Cannabis Businesses