Read Time 3 mins | Written by: CannAcquire
Ghosting isn't just for dating; it's a phenomenon that also occurs in the world of cannabis mergers and acquisitions (M&A). The sudden disappearance of communication during an M&A deal can leave one party in the dark, akin to being "left on read" during an important conversation.
In this blog, we delve into the reasons behind ghosting in cannabis M&A and explore ways to foster open and transparent communication for successful deals.
Why does it happen?
1. Indecision and Uncertainty:
M&A deals are complex, and uncertainties about the deal's outcome or its impact on the future can be overwhelming. Some parties may need time to make decisions or, in some cases, may even avoid facing the situation altogether. This indecision can lead to a communication breakdown, resulting in ghosting.
2. Shifting Priorities:
Business priorities can change rapidly, and what initially appeared as an enticing opportunity may lose its appeal as new priorities emerge. This shift in focus can cause one party to disengage from the M&A process, resulting in silence.
3. Top-Secret Stuff:
M&A deals involve sensitive and confidential information. Parties might fear sharing too much or discussing openly to protect their interests, leading to a communication blackout.
4. Sneaky Negotiation Tactics:
Ghosting can also be used as a cunning negotiation tactic. By disappearing, a party may hope to create a sense of urgency and pressure the other party into making concessions.
5. Scary Skeletons in the Closet:
During due diligence, potential problems or discrepancies may surface, making one party rethink the deal. Instead of addressing these concerns directly, they may choose to ghost to avoid confrontation.
6. Internal Troubles:
Internal issues within a company, such as leadership changes, financial problems, or restructuring efforts, can become distracting during the M&A process, resulting in ghosting.
The Fix? Transparent Communication
While these reasons may explain ghosting in cannabis M&A, it's essential to recognize that such behavior can be frustrating and unprofessional. To ensure successful deals, businesses must prioritize open and transparent communication from the very beginning. Establishing trust through clear and consistent dialogue is vital for building strong partnerships.
At some point during the interaction, both parties must be willing to expose themselves and share genuine intentions. Openly addressing concerns, uncertainties, and priorities fosters a collaborative atmosphere that can lead to more successful M&A outcomes.
If you found this blog post helpful, check out our blog on the 11 Steps for a Successful Retail Acquisition.
What do we do from here?
Ghosting may be prevalent in the cannabis M&A landscape, but it doesn't have to be the norm. By understanding the reasons behind this behavior and committing to open and transparent communication, businesses can navigate the M&A process more effectively.
Creating a trusting and communicative environment is the key to unlocking successful deals and building long-lasting partnerships in the cannabis industry. So, let's banish ghosting and embrace open dialogue for a brighter future in cannabis M&A.
Have questions? Book a call today for assistance as you devise your comprehensive core document.