Why Are Big Cannabis Companies Buying Media Outlets? What's Next?

Fire & Flower Holdings Corp's FFLWF recently completed acquisitions of media outlets Wikileaf and PotGuide is primarily about tech stacking and not media control or amplification, president and CEO Trevor Fencott told Benzinga earlier this week.

While the company does not want to change how the media landscape operates, the surge of M&A deals includes media outlets at a growing rate. With business plans diversifying across the space, how media could be impacted remains unsure.

2021's Cannabis Media M&A Includes Major Names

F&F's activity marks the latest in a summer where major cannabis outlets made moves.

In early August, Leafly announced a go public plan with SPAC Merida Merger Corp. MCMJ. Once complete, Merida plans to take Leafly's name, listing on the Nasdaq under the 'LFLY' symbol. The deal appears close, with Leafly COO Sam Martin speaking to Benzinga about the plans on September 15, 2021.

The deal follows similar efforts made by another cannabis media giant, Weedmaps.

In June, parent company WM Holding Company went public through a deal with SPAC Silver Spike Acquisition Corp. Silver Spike changed its name to WM Technology Inc MAPS after the deal's completion.

Calling the two acquisitions part of the company's "asset-light digital strategy," Fencott said F&F's deal resembles Leafly and Weedmaps in using media as acquisition channels.

See also: Is The Biden Administration Going To Move On Cannabis Reform?

"They allow us to reach consumers out in 'the great internet and beyond,' those that are not, sort of, coming into the stores necessarily," Fencott explained, adding that the deals provide the company with a growing U.S. presence and a hopeful sign that F&F is more than a single-country Canadian operator.

Fencott hopes that the Denver offices acquired from PotGuide, as well as the company's Palm Springs-based branded store makes it, "more and more apparent that we're a North American story, and this is an important part of it."

Another deal this summer saw market data firm Prohibition Partners acquire publication Business of Cannabis on August 4, 2021. Rather than go public, the company intends to create a leader in media and data, according to a Prohibition Partner's press release. The deal plans to build more premium content for the publication. A New York-based cannabis conference was held in September.

Another iconic cannabis brand, High Times, offers shares via its site but not on any markets. While it hasn't gone public, the publication has spent recent years making diversified deals to expand from a media to an events leader.

In 2018, the company acquired Dope Media and its outlets Dope Magazine, Green Rush Daily and Culture Magazine. High Times also offers branded products through partnerships and has dispensaries in California and Michigan.

Will The Cannabis Media M&A Trend Continue?

It appears that cannabis media will continue to be part of M&A deals. What role they play and how they impact the direction of cannabis media can go in various directions.

Elana Goldberg, CEO of publication The Cannigma, said the market should expect more M&A deals involving media outlets. Goldberg said strategic investors help continue funding publication growth efforts, calling the move a win-win for all sides.

Meanwhile, publications provide an established audience base that is often difficult to achieve through digital marketing.

"But it's not just about the business side - these mergers and acquisitions are great for consumers, too," Goldberg added. She noted that quality media will help inform an audience facing a wealth of cannabis products to choose from.

Like the various deals made in recent years and months, Goldberg explained that cannabis media M&A could come in multiple forms, including collaborations between various sectors and brands. In the end, she said it's about product marketing.

"Ultimately, that's the next stage for this space," Goldberg concluded.

For Fencott, he didn't specifically say how media fits into future M&A but he expects significant companies to continue acquiring or building to complete their vertical tech stack.

"There's no question that tech-enabled retail delivers superior results," Fencott stated.

The article's author has written for PotGuide and The Cannigma on a freelance basis. He currently contributes to High Times as well.

Photo: Courtesy Fire & Flower