Chicago firm acquires CT cannabis grower
A multistate cannabis company has completed its acquisition of a dispensary and cultivator in Connecticut, solidifying a position to become a player in the state’s nascent recreational market.
Verano Holdings Corp., a firm with active cannabis businesses in 12 states, announced its acquisition of Connecticut Pharmaceutical Solutions Inc., a Rocky Hill-based cultivation facility, and Caring Nature LLC, a dispensary in Waterbury, in November.
The company announced Tuesday the deal had closed. In October, Verano also closed on a deal to acquire Willow Brook Wellness, a Meriden dispensary.
The Connecticut Pharmaceutical acquisition includes $113.25 million in voting shares and $18.5 million more in “subordinate voting shares of the company upon the first adult-use sale of cannabis in Connecticut,” according to a Verano news release.
Connecticut Pharmaceutical Solutions is one of four licensed cannabis production facilities in the state. All are owned by out-of-state companies. Verano operates under brands such as Zen Leaf and MUV.
Chicago-based Verano is one of several multistate companies that have entered the Connecticut market as the state launches its adult-use program. Some of those companies made their entrances earlier, during talk for full legalization, which the General Assembly adopted in May.
Medical dispensaries and production facilities will be allowed to apply for dual licenses that allow them to participate in both the medical and recreational markets and bypass the lottery system for new licenses.
“We are excited about the continued expansion of both our national platform and our East Coast hub. Entering the Connecticut market ahead of its adultuse transition provides a clear runway for sustainable, long-term growth,” George Archos, Verano founder and chief executive officer, said in a statement included in the November news release announcing the acquisition.
In March, amid talks of legalizing recreational marijuana, multistate company Greenrose Acquisition Corp. announced that it would acquire Theraplant, another production facility in Connecticut.
And in 2019, during another recreational legalization push, Green Thumb Industries announced an $80 million acquisition of Advanced Grow Labs in West Haven.
Connecticut has about 54,000 medical marijuana patients.
Businesses that apply for hybrid licenses must submit plans laying out how they’ll preserve their medical programs and workforce development plans for approval from the Connecticut Social Equity Council.
The council is charged with overseeing the social equity measures that ensure the adult-use program benefits those who have been disproportionately harmed by the war on drugs.
Businesses applying for hybrid licenses can cut down on their conversion fees by participating in at least one joint venture with a social equity partner. Social equity status is determined by income as well as whether the applicant is from a disproportionately impacted area.