PharmaCann, another local player with operations in several states, is being acquired by California-based MedMen for $682 million in stock. "We looked at going public ourselves or doing other transactions," says PharmaCann CEO Teddy Scott. "We looked at five potential scenarios. In three we would have been the acquiring party; in two we would have been acquired. We decided to go big (by merging) and picked the right partner."

Verano is selling to Phoenix-based Harvest Health & Recreation for $850 million in stock. Verano's management will lead the combined company's operations east of the Mississippi.

Grassroots, which raised $90 million in March, claims it's the largest privately held cannabis company, with licenses in 11 states. CEO Mitch Kahn says, "We're focused on gaining scale . . . looking to buy scale in important states we aren't in." But he wouldn't say how he'll accomplish that, whether the company will go public, merge or look for other sources of capital.

Like other CEOs, he sees the list of long-term players shrinking as the industry grows, from an estimated $12 billion last year to $31 billion in 2022, according to California-based research firm Arcview Group. "There will be three or four ultimate surviving big companies," Kahn says. "There are some medium-size players left. If you're in two or three states today, it's hard to think you can get big enough fast enough to stay in the game."

One frequently discussed industry scenario is that the big consumer-packaged goods companies, including those in alcohol and tobacco, will expand into weed through acquisitions. They've already moved into Canada, where recreational cannabis use was legalized nationwide last year.

BIG BUCKS UP NORTH

Tobacco giant Altria paid $1.8 billion for half of Canadian cannabis company Cronos; beer company Constellation Brands invested $4 billion in Canopy Growth, also in Canada. Even Breakthru Beverage, an alcohol distributor co-owned by Chicago's Wirtz family, has gotten into the act, paying $7 million for a stake in marijuana company CannTrust.

Because marijuana is still illegal under U.S. federal law, "right now (the big companies) can't really buy their way in," says Ben Kovler, CEO of Green Thumb Industries. "There is a competitive moat around all the U.S. operators."

Pending congressional legislation called the STATES Act, which would formally recognize the states' ability to legalize cannabis use, could change things. It's seen as a way to allow large investors to get involved, increasing the flow of capital to U.S. cannabis companies. Canadian companies, which enjoy a nearly 10-to-1 stock premium to their U.S. counterparts, are well-positioned to seize the opportunity.

Canopy Growth, Canada's biggest cannabis company, paid $300 million last month for the right to acquire New York-based Acreage Holdings for $3.4 billion, making a bet that cannabis will become legal soon in the U.S. It's also a sign that the next wave of consolidation already has begun, with public companies buying each other. Chicago's cannabis players will have to surf that wave, or be swept up in it.

"I don't think anyone planned or thought Chicago would be the center of multiple (large operators)," says John Downs, director of business development at Arcview. "Will that continue to be the case? I don't know. Consolidation will continue."