Jim Cramer predicts more deals taking place in the cannabis space in 2019. Cramer indicated that cannabis companies such as Canopy Growth (WEED), Tilray (TLRY), Cronos Group (CRON), and Aurora Cannabis (ACB) are advancing “ahead of their smaller rivals,” a trend which he believes will continue. He added that the large cash position with Cronos Group and Canopy Growth, which are Cramer’s top two picks for the industry, will give each company a “huge advantage” over rivals (MJ).
Cramer believes companies will establish themselves by acquiring smaller industry players, citing Canopy Growth’s mergers and acquisitions spree in November.
What we predicted: A comparison
In our top ten predictions, we listed “consolidation and synergies,” which closely aligns with Cramer’s views. We stated that we’ll be interested in watching how the cannabis industry continues to consolidate in 2019 and how the partnerships will evolve. This view comes from the already increased need for more established players to grow their footprints inorganically, as we saw in 2018.
We also listed “moving up the value chain” as one of the items in our 2019 list. We mentioned in our series that “as established cannabis companies seek products with a potential for higher margins, they will likely look to value-added innovation. This trend may also lead to the emergence of smaller companies providing unique products and solutions moving up the value chain. Companies with a wide portfolio of intellectual property will likely become an attractive target for bigger companies.”
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