A Massachusetts-based medical marijuana company is planning to exit the Hampton Roads market by selling its license and operations to an Illinois business.
Chicago-based Verano plans to purchase The Cannabist Company’s entire Hampton Roads operation in a $90 million deal, according to a July 29 announcement.
If finalized, the deal would make Verano the sole company allowed to operate as a medical marijuana provider in the region, per Virginia law. The state allows only one medical marijuana operator and retailor to do business in each of its five health areas.
“Today’s agreement further diversifies Verano’s portfolio, which, since the company’s inception, has remained focused on expanding our business into limited-license markets to scale both our wholesale and retail operations,” said Verano Chairman and CEO George Archos in the announcement.
The deal includes one cultivation and production facility and six dispensaries in Norfolk, Virginia Beach, Portsmouth, Suffolk, Hampton and Williamsburg.
Archos said the deal also would leave the company well-positioned for if and when retail marijuana sales were approved in Virginia. In 2021, Virginia legalized possession of small amounts of cannabis but punted on establishing the regulatory framework for a retail market. Gov. Glenn Youngkin vetoed Democratic bills this year seeking to establish a retail market.
Under the agreement, Verano also would be able to sell throughout the state via home delivery and wholesale operations.
The $90 million agreement includes $20 million in cash, $40 million in Class A subordinate voting shares and a $30 million promissory note upon closing, according to the announcement.
The Cannabist Company will continue operating in the Richmond area, according to the announcement.
“As mentioned in previous announcements, we are continuing to optimize our footprint as we target building a better business, which includes deleveraging our balance sheet,” The Cannabist Company CEO David Hart said in the announcement.
Verano operates 13 production facilities in 13 states, and reported $221 million in revenue for the first quarter of 2024 ending March 31.
Trevor Metcalfe, 757-222-5345, trevor.metcalfe@pilotonline.com
