- Baker, a top cannabis tech platform, is acquiring Grassworks, one of it’s largest competitors.
- The move puts Baker’s product in 850 dispensaries in valuable markets.
- It’s a sign of M&A activity heating up in the industry.
Baker, a Denver-based customer engagement platform sometimes called the ‘Salesforce of Pot’, acquired smaller rival Grassworks, in the latest merger in the maturing legal cannabis industry.
Both companies are so-called customer relationship management platforms, that help businesses track sales and customer relationships. The move adds 150 dispensary clients to Baker’s roster of 700 in US states with legal cannabis as well as a handful of Canadian provinces and firms up Baker’s foothold in the Pacific Northwest market.
Morgan Paxhia, a managing director at Poseidon Asset Management, a cannabis-focused investment firm that led Baker’s $3.5 million Series A round in May, told Business Insider in an email that M&A activity is a “longer and larger trend,” in the cannabis industry, and consolidation is a “likely path for well-positioned companies.”
“We see the Baker deal as a significant and historic step in the industry as this could mark the start of well constructed ancillary deals,” Paxhia added. The ancillary space — namely, companies that serve the industry but don’t actually sell the plant — in cannabis is the hottest area of investment, as it bypasses the often byzantine patchwork of local, state, and federal regulations in the industry.
Cannabis is legal in a number of states, but it’s still illegal under federal law, making some investors nervous.
Constellation Brands, the third-largest beer company in the US, in October said it paid $191 million for a 9.9% stake in Canopy Growth, which is the largest legal grower of marijuana in the world. And, Springbig, a loyalty marketing platform for cannabis dispensaries, last week Read More Here