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The graph shows the percentage of stock in acquisition consideration for transactions targeted at the Cultivation & Retail sector.
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The green line (measured on the left axis) shows the stock percentage of consideration, while the orange line (measured on the right axis) depicts the price of the AdvisorShares Pure Cannabis YOLO ETF.
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There is a correlation between stock prices and the percent of stock used in M&A, although there is a lag because Viridian only tracks closed acquisitions.
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Interestingly, the percentage of stock increased from 13% to 43% between the third quarter of 2022 to the end of 2022, undoubtedly due to the stock rally that accompanied widespread anticipation of the passage of the SAFE Act.
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Surprisingly, the percentage only declined to 34% in Q1: 23, albeit on lower transaction volume.
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There are three reasons to expect an increase in the percentage of stock used in acquisitions:
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Optimistically, the SAFE Act was reintroduced with bipartisan support, and perhaps the eighth time is the charm? Passage of the …
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