Last month, Massachusetts became the latest to join the ranks of US states now legally selling recreational cannabis. While legalization in the state of Massachusetts was officially declared back in July this year, the first licensed dispensaries in the state opened their doors for recreational sale on November 20th.
With an estimated $1.8 billion industry at stake in the New England state, companies are already heading east to establish themselves in newly legal markets.
Narkewicz's jurisdiction quickly became the center of attention of a significant acquisition, after retail experts, Green Growth Brands entered the Northampton market with a splash. Through the acquisition of membership interests in Northampton-based Just Healthy LLC, Green Growth Brands picked up the rights to three marijuana dispensaries, as well as cultivation and production licenses in the state. With the proximity to a large student population in nearby Amherst, Green Growth Brands plans to center its entry into the Northampton market around creating a footprint as the go-to cannabis retail location in Massachusetts.
Green Growth Brands, CEO Peter Horvath commented: "Not only are we now able to operate in Massachusetts, but we are able to do it through the acquisition of licenses and rights that give us almost turnkey vertical integration. When we look at other transactions of this nature, in this state and elsewhere in the U.S., we can say that we are very happy with the terms of the deal and with our relationship with Just Healthy's management team."
A New Retail Movement Begins
According to Massachusetts' Cannabis Control Commission, the state's two recreational dispensaries – Cultivate (in Leicester) and New England Treatment Access (in Northampton) have seen $4.8 million in sales since they opened for legal recreational pot sales in late November. In an effort to capture a healthy portion of this new market, companies such as Green Growth Brands is making the move early on. They also picked up a series of assets beyond the previously mentioned licenses. These included all grow equipment and supplies, all production equipment and supplies, the assumption of all leases, intellectual property owned by Just Healthy and all other assets necessary to operate its vertically integrated operations.
The acquisition was just another tranche of their aggressive expansion plans after raising CAD$140 million prior to its recent RTO. The company has stormed out of the gate, zeroing in on establishing authentic brands and innovative stores. Prior to the RTO, there was much excitement over the possibilities of a fully-qualified retail team entering the sector. Moving forward, their game plan doesn't just begin and end with cannabis retail stores. The company is also aggressively moving into the cannabidiol space, which is pegged to potentially reach $22 billion by 2022. Due to its non-intoxicating nature, the mainstream potential for CBD products is quite high- even for those uncomfortable the other prominent (and psychoactive) cannabinoid, THC.
Massachusetts Growing The Eastern Market
Through a strategic partnership with Compassionate Organics, Green Thumb Industries is also moving forward to operationalize a Boston-based medical marijuana dispensary on historic Newbury Street. Green Thumb is vertically integrated, with a primary focus of being a national cannabis consumer packaged goods company. The Chicago-based company owns and operates a national chain of retail cannabis dispensaries. Green Thumb has eight manufacturing facilities and licenses for 60 retail locations across eight highly-regulated US markets.
Getting past the regulatory requirements can prove difficult. Despite publicly stating that it will not sell its products in the US until they're federally legal, Canopy Growth Corporation is intently keeping its eye on all US markets. The cannabis giant recently announced it was buying pot research company Ebbu, in a deal worth $25 million. The deal could include an additional $75 million in cash and shares, if certain scientific-related milestones are achieved within two years. Canopy plans to employ Ebbu's assets and personnel to conduct R&D, but will not engage in production nor sales until the US lifts prohibition federally.
Arizona-based Harvest Health & Recreation is a vertically integrated cannabis company with permits and licenses in 10 US states-including local approvals in Massachusetts. The company recently acquired CBx Enterprises, whose technology is utilized by Evolab, CBx Sciences and CBx Essentials. CBx's CO2 extraction abilities help to give Harvest further abilities to access patients and consumers across the country.
In another newly legalized state, Michigan, Acreage Holdings Inc.recently announced it would acquire a Michigan real estate portfolio ahead of the state's official cannabis licensing. Through an agreement to acquire the assets of Michigan-based Blue Tire Holdings, LLC, Acreage Holdings now has a foothold to bring cannabis products to Michigan residents throughout the state. The move into Michigan is strategic on behalf of Acreage Holdings, as the state is one of the highest per-capita cannabis markets in the US.
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