This morning, an announcement was made by Alcanna ($CLIQ) that it’s acquiring YSS Corporation in an all-stock transaction. $CLIQ is also going to market simultaneously, shopping for $25MM to fund the whole thing up.

From there, a ‘new’ standalone company will be created from existing NOVA Cannabis and $YSS – and spun out.

The market reaction? Looks like they are pretty happy that $CLIQ wiped the cannabis business off of its’ non-core shoe:

As to $YSS, ‘the little independent that might have‘, it’s all over. The corporate expense – that last mile of operational expense – was apparently more than a single mile. The financing they could get was expensive, and material operational cashflow never materialized. I doubt many outside of the store staff will survive, and perhaps even many of those won’t. NOVA’s due diligence during the next few weeks will decide.

$CLIQ is taking over everything related to central operations, and will continue to do so until the new toddler shows it can walk.

Neither of these companies (or in Alcanna’s case, a subsidiary) was showing signs of going anywhere fast. That Alcanna is happy to hit the ‘eject’ button says they didn’t see it going anywhere at all. With heavy concentration in Alberta, the new shop is almost beginning at a disadvantage, and even its’ future course has already been set – they’re going to be the ‘Bulk Barn’ of cannabis.

That won’t make them popular among peers (not that that matters). But there already is some ‘no-frills’ type of experience in the ‘Canna Cabana’ chain ($HITI), and I have no doubt Couche-Tard (in $FAF) is utterly fearless concerning a potential ‘race to the bottom’.

That $YSS shareholders are being told they’re receiving a premium for their shares (equivalent value being calculated by $CLIQ at $0.1635) doesn’t seem to have raised any heartbeats. I can’t even raise a chart. It was last trading at $0.12.

Seeing $META, Friendly Stranger, and now $YSS being taken out, one has to wonder when Prairie Records (Westleaf) will be next. Cannabis retailing is the least sexy thing in the space, yet paradoxically, it’s the actual moment when revenue actually incites.

More deals will be made in the months ahead. By Tokyo Smoke, by $FAF, and by $HITI. At this point, any marginal independent or small chain without cash is a duck flying around during hunting season. There will be winners in retail. How big the prize is, is unknown.

$HITI is up 16% on this news (as of writing). I doubt that’s based upon their future prospects, but suspect it’s because compared to the rest of the cannabis retailers out there: they’re simply the tallest midget.

The preceding is the opinion of the author, and is in no way intended to be a recommendation to buy or sell any security or derivative. Of companies mentioned, the author only holds position in $HITI.