Can AI Technology Elevate M&A Deals in the Cannabis Industry?

by | Jun 29, 2022

Written by Kristina Etter

Kristina is a digital content creator and designer. She has a talent for creating engaging and informative content that resonates with our professional audience. Kristina’s passion for the cannabis industry stems from her belief that it has the potential to revolutionize the world in many ways, and has a personal testimony of cannabis success.

The cannabis industry is poised to become the fastest consumer industry globally by 2028. Both recreational and medical cannabis use is on the rise worldwide. Experts claim that the Safe Act in 2021 that federalized legalization helped monetize the industry and fostered bank loans to cannabis-related companies – plus the advent of technology such as blockchain in cannabis and AI technology, cannabis companies are on a very secure prospect. It’s not surprising that venture capitalists and M&A deals have drastically increased within such a booming market, multiplying the opportunities within. Approximately $5.3 billion in VC has been deployed into more than 500 cannabis-related firms since 2014. As the global market is projected to reach $100 billion by 2026, VC and M&A have quadrupled. So how can AI technology amplify such trends? What are the major M&A deals in the cannabis industry? Let’s explore.

AI to boost cannabis-focused M&A

Either to optimize the safe delivery of cannabis products or by using AI to find out more about specific strain recommendations, AI is well present in the cannabis business. Machine learning, Artificial Intelligence, and blockchain are currently discussed as the main drivers of the industry’s growth. On top of that, relying on AI and blockchain can help consumers get safer products and reduce illegal marijuana trading.

Various fields are touched by AI technology – from supply chain management to product compliances and network design. The aim is to better understand and predict consumer behavior and help cannabis businesses increase and scale their revenues. In the future, we could imagine consumers being able to order and pay for their favorite strains and get them delivered, all powered by AI and blockchain.

How AI technology can improve M & A deals alongside blockchain and smart contracts is increasingly catching everyone’s attention in the business. At the end of 2021, cannabis companies grew, on average, $28 million over 70 funding events, which represents an increase of 86%.

A report by Deloitte highlights that AI can reduce the time spent reviewing contracts, a time-consuming task in the cannabis business. While gathering most data into a single source – let’s say summarizing information from 1,000 contracts, for example – AI enables faster decision-making for cannabis companies seeking to acquire existing actors in the business. The progress enabled by AI technology can not stay unseen for a fast-growing industry like cannabis – which is turning into the number one consumer market in the world.

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