The graph demonstrates a generally positive impact on the stock price of the Buyer in cannabis M&A transactions and this gain seems to relate to the size of the transaction. Cannabis investors appear to favor transformational sized deals that exceed 50% of the pre-transaction asset size of the acquirer.
We calculated the percent change in the acquirer’s stock price from two days prior to an acquisition announcement to two days after the announcement. We then adjusted this by subtracting the percent change in the North American Marijuana Index. In this way we isolated the impact of the announcement from the underlying market movement. This net gain is displayed in the blue bars and measured on the left vertical axis.