Cannabis News

While the mergers and acquisitions (M&A) space in the cannabis industry has significantly slowed in 2020, it certainly hasn’t stopped—not even during a pandemic.

According to S&P Global Market Intelligence, “a drop in company valuations complicated by the coronavirus-triggered capital squeeze” were the two major reasons for the slowdown. Still, S&P Global reports U.S. and Canadian cannabis and cannabis-related companies completed 124 deals in 2020, worth a combined $615.1 million—compared to 249 deals in 2019 and 324 deals in 2018.

We also learned this year, according to a Department of Justice (DOJ) whistleblower, that “U.S. Attorney General William Barr was motivated by his personal dislike of the cannabis industry when he launched multiple Antitrust Division merger investigations into nearly a dozen cannabis deals last year,” Cannabis Business Times reported in July. According to Eric Berlin, co-chair of Denton’s Cannabis Practice, “Many of the cannabis mergers under investigation did not get closed … due to these additional costs and time delays, and now, not only are the companies involved left with little to no recourse, but the DOJ’s actions have dramatically slowed the M&A activity in the industry.”

However, recovering valuations and renewed investor interest are expected to increase deals in 2021, according to the S&P Global. Not to mention, it was a monumental year for cannabis legalization in the U.S. And, cannabis businesses in most states and provinces were considered essential services. As we wait to see what 2021 deal-making brings, we’ve rounded up some of the most notable deals that closed, and those that fell through, in 2020.

1. Cresco Labs Acquires Origin House

Before the coronavirus pandemic, Cresco Labs officially closed its acquisition of Canada-based cannabis company Origin House. The deal was originally valued at C$1.1 billion, though the deal’s value ended up being lower amidst declining stocks and antitrust review delays. Perhaps the biggest cannabis transaction in the year, the move paved the way for Cresco Labs’ entry into the United States’ largest cannabis market: California.

“The acquisition of Origin House makes Cresco a leading wholesale distributor in California, selling into over 575 dispensaries, representing approximately 65% of California’s storefront dispensaries. Origin House’s Continuum distribution platform distributes 13 third-party brands, including Kings Garden,” according to a press release.  

Cresco Labs’ brands are currently distributed in seven states, including Arizona, California, Illinois, Massachusetts, New York, Ohio and Pennsylvania.

2. Cresco Labs Terminates Tryke Companies Purchase Agreement

In September 2019, Cresco Labs announced its intention to acquire Tryke Companies, which included the Reef Dispensary portfolio in Nevada and Arizona. The purchase consideration at the time was $252.5 million for Tryke’s operating assets, plus $30 million for the company’s real estate assets. However, in April 2020, the agreement was terminated mutually, according to a press release.

Cresco Labs CEO and Co-Founder Charlie Bachtell said, “Our acquisition of Tryke has been impacted by regulatory delays, a decline in capital markets, and now COVID-19, which brought additional risk to this transaction. Given these events, we feel the resources previously targeted for this transaction are better invested in our existing markets, where we have high visibility and certainty of return on capital.”

3. Canopy Growth Corp. and Acreage Holdings Amend Merger Terms

Canopy Growth made global headlines and sent stocks surging in April 2019 when it announced it would acquire Acreage Holdings for $3.4 billion with one significant contingency: the United States federally legalizes cannabis. At the time, Acreage Holdings held licenses in 20 states, and shareholders were expected to receive a $300-million upfront cash payment when the deal closed. Acreage was also to gain access to Canopy’s Tweed and Tokyo Smoke brands.

Since the announcement, Canopy CEO Bruce Linton was terminated. And in June, the Canopy/Acreage deal was amended. Still contingent upon federal legalization, the value of the deal was brought down to $843 million, with an upfront payment of $37.5 million to Acreage. And the same update, Acreage CEO Kevin Murphy announced his resignation, though he still serves as chairman and sits on the board of directors. Bill Van Faasen was appointed interim CEO. 

4. Curaleaf Acquires Grassroots

In a $700-million deal, Curaleaf acquired Grassroots Cannabis in late July. According to the company’s executive chairman on CNN Business in July, the acquisition makes Curaleaf the biggest cannabis company in the world, based on its reported $1 billion in annual revenue.

Curaleaf is now operational in 23 states, with 88 operational dispensaries and 22 cultivation sites with 1.6 million square feet of cultivation capacity.

“Many of the MSOs have … retrenched into markets where they were performing well or where they have capital to build out, whereas Curaleaf has really continued to keep our foot on the accelerator and expand into more markets—given where we have a strong balance sheet and we can actually take on those projects,” according to Curaleaf CEO Joseph Lusardi.

5. Aurora Cannabis and Aphria Make More Moves Into the U.S.

Canadian cannabis powerhouses Aurora Cannabis and Aphria strengthened their footholds in the U.S. cannabis market this year.

Aurora Cannabis completed its acquisition of Reliva LLC, a hemp-derived CBD manufacturer that sells products in the United States, in May.

And this month, Aphria closed its acquisition of SweetWater Brewing Company, a U.S.-based independent craft brewer. According to a CBT report: “Aphria plans to introduce its adult-use cannabis brands, such as Broken Coast, Riff, Soleil and Good Supply, to the U.S. market as cannabis-free beverages through SweetWater products and harness SweetWater’s expertise in what [Aphria CEO and Chairman Irwin Simon] said is the growing, $29-billion craft beer market in the U.S.”

6. Trulieve Enters its Fifth State with Two Acquisitions in Pennsylvania

In September, multi-state operator Trulieve (whose most significant foothold is Florida’s medical cannabis market), announced it had entered into definitive agreements PurePenn LLC and Pioneer Leasing & Consulting LLC and Keystone Relief centers (dba Solevo Wellness), according to a press release. The deals are pending closing conditions and regulatory approvals.

The move will create Trulieve’s vertical integration in Pennsylvania—with three retail licenses and 35,000 square feet of cultivation (with plans to expand to 90,000 square feet by Q1 2021). 

According to the press release, “Under its current 100% wholesale model, PurePenn’s sizeable cultivation footprint supplies an extensive distribution network, including Solevo and other private and public medical marijuana companies.” 

7. Stem Holdings Acquires Driven Deliveries

In a data-centric rebrand, multi-state, vertically integrated operator Stem Holdings announced its definitive agreement to acquire Driven Deliveries.

The $31 million deal emphasizes a growing trend in an increasingly contactless COVID-19 economy: delivery.

“In May 2020, Driven Deliveries reported it notched an 18% increase in new consumers over April and a more than 20% increase in gross collections,” CBT reported. 

“The story of cannabis M&A in recent years has been one of market share and multi-state expansion. Now, with capital markets running dry and a global pandemic continuing to exert economic pressures across the board, the strategy is tightened. Technology assets can help build a vertically integrated portfolio in different ways than pure geographic reach,” according to CBT’s report.

8. Columbia Care Acquires The Green Solution

Multi-state, vertically integrated cannabis company Columbia Care closed its transaction with The Green Solution, one of Colorado’s largest vertically integrated operators, in September, bringing Columbia Care’s footprint to 95 facilities open or under development in the United States and European Union.

According to a press release, “The TGS acquisition establishes Columbia Care as the leader in the $1.75B Colorado market, the second largest cannabis market in the world. With 23 dispensaries, many located in the Denver metro area and tourist destinations such as Aspen, TGS supplies its own dispensaries along with its wholesale distribution network from its six operational cultivation facilities and one highly automated manufacturing facility. Additionally, a Columbia Care affiliate was recently awarded the opportunity to pursue a marijuana hospitality business license in Adams County, one of the first consumption lounges in the state.”

9. Verano Holdings Acquires AltMed

In November Verano Holdings announced it would acquire Florida-based AltMed, which would form one of the largest privately held cannabis companies in the United States, according to a CBT report.

Verano, which is vertically integrated in 12 states, made headlines in 2019 when multi-state operator Harvest Health & Recreation announced plans to acquire the company. At the time, the deal would have brought Harvest to 200 cannabis facilities in 16 states. And combined, the megadeal would have made Harvest one of the largest operators in the United States. However, in March of this year, the two companies announced their mutual termination of their Business Combination Agreement., citing COVID-19 and regulatory challenges.

The AltMed merger takes Verano in a new direction in Arizona and in Florida, where Verano had divested its assets in the Harvest transaction, Verano CEO George Archos said. “Florida was always an attractive market for us. They have a great patient base, a great population and limited licenses. In Florida, you have to basically depend on yourself in order to succeed. It’s a vertically integrated business, so you have to produce all your own flower and all your own products to sell through your stores, which is something that we’re very good at, and so is AltMed,” Archos told CBT.

10. High Times Gets Into the Retail Game

Hightimes Holdings Corp., which publishes the cannabis magazine High Times, announced on April 28 a definitive agreement to acquire 13 California cannabis retail licenses from Harvest Health & Recreation, according to a press release.

The mostly stock-based transaction would make High Times a significant retailer player in the United State’s largest cannabis market “overnight,” according to the April release. The intention is to rebrand the Harvest dispensaries to become “High Times destinations,” leveraging its iconic brand its built over more than 45 years.

However, since April, the deal has been amended to be valued at $67.5 million and include 10 dispensaries, according to Green Market Report. And in September, Hightimes lost its lease on two San Francisco retail locations due to non-payment of rent, according to SF Weekly.

Editor’s note: Bookmark this pagefor more news on the latest mergers and acquisitions in the cannabis industry.

While the mergers and acquisitions (M&A) space in the cannabis industry has significantly slowed in 2020, it certainly hasn’t stopped—not even during a pandemic.

According to S&P Global Market Intelligence, “a drop in company valuations complicated by the coronavirus-triggered capital squeeze” were the two major reasons for the slowdown. Still, S&P Global reports U.S. and Canadian cannabis and cannabis-related companies completed 124 deals in 2020, worth a combined $615.1 million—compared to 249 deals in 2019 and 324 deals in 2018.

We also learned this year, according to a Department of Justice (DOJ) whistleblower, that “U.S. Attorney General William Barr was motivated by his personal dislike of the cannabis industry when he launched multiple Antitrust Division merger investigations into nearly a dozen cannabis deals last year,” Cannabis Business Times reported in July. According to Eric Berlin, co-chair of Denton’s Cannabis Practice, “Many of the cannabis mergers under investigation did not get closed … due to these additional costs and time delays, and now, not only are the companies involved left with little to no recourse, but the DOJ’s actions have dramatically slowed the M&A activity in the industry.”

However, recovering valuations and renewed investor interest are expected to increase deals in 2021, according to the S&P Global. Not to mention, it was a monumental year for cannabis legalization in the U.S. And, cannabis businesses in most states and provinces were considered essential services. As we wait to see what 2021 deal-making brings, we’ve rounded up some of the most notable deals that closed, and those that fell through, in 2020.

1. Cresco Labs Acquires Origin House

Before the coronavirus pandemic, Cresco Labs officially closed its acquisition of Canada-based cannabis company Origin House. The deal was originally valued at C$1.1 billion, though the deal’s value ended up being lower amidst declining stocks and antitrust review delays. Perhaps the biggest cannabis transaction in the year, the move paved the way for Cresco Labs’ entry into the United States’ largest cannabis market: California.

“The acquisition of Origin House makes Cresco a leading wholesale distributor in California, selling into over 575 dispensaries, representing approximately 65% of California’s storefront dispensaries. Origin House’s Continuum distribution platform distributes 13 third-party brands, including Kings Garden,” according to a press release.  

Cresco Labs’ brands are currently distributed in seven states, including Arizona, California, Illinois, Massachusetts, New York, Ohio and Pennsylvania.

2. Cresco Labs Terminates Tryke Companies Purchase Agreement

In September 2019, Cresco Labs announced its intention to acquire Tryke Companies, which included the Reef Dispensary portfolio in Nevada and Arizona. The purchase consideration at the time was $252.5 million for Tryke’s operating assets, plus $30 million for the company’s real estate assets. However, in April 2020, the agreement was terminated mutually, according to a press release.

Cresco Labs CEO and Co-Founder Charlie Bachtell said, “Our acquisition of Tryke has been impacted by regulatory delays, a decline in capital markets, and now COVID-19, which brought additional risk to this transaction. Given these events, we feel the resources previously targeted for this transaction are better invested in our existing markets, where we have high visibility and certainty of return on capital.”

3. Canopy Growth Corp. and Acreage Holdings Amend Merger Terms

Canopy Growth made global headlines and sent stocks surging in April 2019 when it announced it would acquire Acreage Holdings for $3.4 billion with one significant contingency: the United States federally legalizes cannabis. At the time, Acreage Holdings held licenses in 20 states, and shareholders were expected to receive a $300-million upfront cash payment when the deal closed. Acreage was also to gain access to Canopy’s Tweed and Tokyo Smoke brands.

Since the announcement, Canopy CEO Bruce Linton was terminated. And in June, the Canopy/Acreage deal was amended. Still contingent upon federal legalization, the value of the deal was brought down to $843 million, with an upfront payment of $37.5 million to Acreage. And the same update, Acreage CEO Kevin Murphy announced his resignation, though he still serves as chairman and sits on the board of directors. Bill Van Faasen was appointed interim CEO. 

4. Curaleaf Acquires Grassroots

In a $700-million deal, Curaleaf acquired Grassroots Cannabis in late July. According to the company’s executive chairman on CNN Business in July, the acquisition makes Curaleaf the biggest cannabis company in the world, based on its reported $1 billion in annual revenue.

Curaleaf is now operational in 23 states, with 88 operational dispensaries and 22 cultivation sites with 1.6 million square feet of cultivation capacity.

“Many of the MSOs have … retrenched into markets where they were performing well or where they have capital to build out, whereas Curaleaf has really continued to keep our foot on the accelerator and expand into more markets—given where we have a strong balance sheet and we can actually take on those projects,” according to Curaleaf CEO Joseph Lusardi.

5. Aurora Cannabis and Aphria Make More Moves Into the U.S.

Canadian cannabis powerhouses Aurora Cannabis and Aphria strengthened their footholds in the U.S. cannabis market this year.

Aurora Cannabis completed its acquisition of Reliva LLC, a hemp-derived CBD manufacturer that sells products in the United States, in May.

And this month, Aphria closed its acquisition of SweetWater Brewing Company, a U.S.-based independent craft brewer. According to a CBT report: “Aphria plans to introduce its adult-use cannabis brands, such as Broken Coast, Riff, Soleil and Good Supply, to the U.S. market as cannabis-free beverages through SweetWater products and harness SweetWater’s expertise in what [Aphria CEO and Chairman Irwin Simon] said is the growing, $29-billion craft beer market in the U.S.”

6. Trulieve Enters its Fifth State with Two Acquisitions in Pennsylvania

In September, multi-state operator Trulieve (whose most significant foothold is Florida’s medical cannabis market), announced it had entered into definitive agreements PurePenn LLC and Pioneer Leasing & Consulting LLC and Keystone Relief centers (dba Solevo Wellness), according to a press release. The deals are pending closing conditions and regulatory approvals.

The move will create Trulieve’s vertical integration in Pennsylvania—with three retail licenses and 35,000 square feet of cultivation (with plans to expand to 90,000 square feet by Q1 2021). 

According to the press release, “Under its current 100% wholesale model, PurePenn’s sizeable cultivation footprint supplies an extensive distribution network, including Solevo and other private and public medical marijuana companies.” 

7. Stem Holdings Acquires Driven Deliveries

In a data-centric rebrand, multi-state, vertically integrated operator Stem Holdings announced its definitive agreement to acquire Driven Deliveries.

The $31 million deal emphasizes a growing trend in an increasingly contactless COVID-19 economy: delivery.

“In May 2020, Driven Deliveries reported it notched an 18% increase in new consumers over April and a more than 20% increase in gross collections,” CBT reported. 

“The story of cannabis M&A in recent years has been one of market share and multi-state expansion. Now, with capital markets running dry and a global pandemic continuing to exert economic pressures across the board, the strategy is tightened. Technology assets can help build a vertically integrated portfolio in different ways than pure geographic reach,” according to CBT’s report.

8. Columbia Care Acquires The Green Solution

Multi-state, vertically integrated cannabis company Columbia Care closed its transaction with The Green Solution, one of Colorado’s largest vertically integrated operators, in September, bringing Columbia Care’s footprint to 95 facilities open or under development in the United States and European Union.

According to a press release, “The TGS acquisition establishes Columbia Care as the leader in the $1.75B Colorado market, the second largest cannabis market in the world. With 23 dispensaries, many located in the Denver metro area and tourist destinations such as Aspen, TGS supplies its own dispensaries along with its wholesale distribution network from its six operational cultivation facilities and one highly automated manufacturing facility. Additionally, a Columbia Care affiliate was recently awarded the opportunity to pursue a marijuana hospitality business license in Adams County, one of the first consumption lounges in the state.”

9. Verano Holdings Acquires AltMed

In November Verano Holdings announced it would acquire Florida-based AltMed, which would form one of the largest privately held cannabis companies in the United States, according to a CBT report.

Verano, which is vertically integrated in 12 states, made headlines in 2019 when multi-state operator Harvest Health & Recreation announced plans to acquire the company. At the time, the deal would have brought Harvest to 200 cannabis facilities in 16 states. And combined, the megadeal would have made Harvest one of the largest operators in the United States. However, in March of this year, the two companies announced their mutual termination of their Business Combination Agreement., citing COVID-19 and regulatory challenges.

The AltMed merger takes Verano in a new direction in Arizona and in Florida, where Verano had divested its assets in the Harvest transaction, Verano CEO George Archos said. “Florida was always an attractive market for us. They have a great patient base, a great population and limited licenses. In Florida, you have to basically depend on yourself in order to succeed. It’s a vertically integrated business, so you have to produce all your own flower and all your own products to sell through your stores, which is something that we’re very good at, and so is AltMed,” Archos told CBT.

10. High Times Gets Into the Retail Game

Hightimes Holdings Corp., which publishes the cannabis magazine High Times, announced on April 28 a definitive agreement to acquire 13 California cannabis retail licenses from Harvest Health & Recreation, according to a press release.

The mostly stock-based transaction would make High Times a significant retailer player in the United State’s largest cannabis market “overnight,” according to the April release. The intention is to rebrand the Harvest dispensaries to become “High Times destinations,” leveraging its iconic brand its built over more than 45 years.

However, since April, the deal has been amended to be valued at $67.5 million and include 10 dispensaries, according to Green Market Report. And in September, Hightimes lost its lease on two San Francisco retail locations due to non-payment of rent, according to SF Weekly.

Editor’s note: Bookmark this pagefor more news on the latest mergers and acquisitions in the cannabis industry.

While the mergers and acquisitions (M&A) space in the cannabis industry has significantly slowed in 2020, it certainly hasn’t stopped—not even during a pandemic.

According to S&P Global Market Intelligence, “a drop in company valuations complicated by the coronavirus-triggered capital squeeze” were the two major reasons for the slowdown. Still, S&P Global reports U.S. and Canadian cannabis and cannabis-related companies completed 124 deals in 2020, worth a combined $615.1 million—compared to 249 deals in 2019 and 324 deals in 2018.

We also learned this year, according to a Department of Justice (DOJ) whistleblower, that “U.S. Attorney General William Barr was motivated by his personal dislike of the cannabis industry when he launched multiple Antitrust Division merger investigations into nearly a dozen cannabis deals last year,” Cannabis Business Times reported in July. According to Eric Berlin, co-chair of Denton’s Cannabis Practice, “Many of the cannabis mergers under investigation did not get closed … due to these additional costs and time delays, and now, not only are the companies involved left with little to no recourse, but the DOJ’s actions have dramatically slowed the M&A activity in the industry.”

However, recovering valuations and renewed investor interest are expected to increase deals in 2021, according to the S&P Global. Not to mention, it was a monumental year for cannabis legalization in the U.S. And, cannabis businesses in most states and provinces were considered essential services. As we wait to see what 2021 deal-making brings, we’ve rounded up some of the most notable deals that closed, and those that fell through, in 2020.

1. Cresco Labs Acquires Origin House

Before the coronavirus pandemic, Cresco Labs officially closed its acquisition of Canada-based cannabis company Origin House. The deal was originally valued at C$1.1 billion, though the deal’s value ended up being lower amidst declining stocks and antitrust review delays. Perhaps the biggest cannabis transaction in the year, the move paved the way for Cresco Labs’ entry into the United States’ largest cannabis market: California.

“The acquisition of Origin House makes Cresco a leading wholesale distributor in California, selling into over 575 dispensaries, representing approximately 65% of California’s storefront dispensaries. Origin House’s Continuum distribution platform distributes 13 third-party brands, including Kings Garden,” according to a press release.  

Cresco Labs’ brands are currently distributed in seven states, including Arizona, California, Illinois, Massachusetts, New York, Ohio and Pennsylvania.

2. Cresco Labs Terminates Tryke Companies Purchase Agreement

In September 2019, Cresco Labs announced its intention to acquire Tryke Companies, which included the Reef Dispensary portfolio in Nevada and Arizona. The purchase consideration at the time was $252.5 million for Tryke’s operating assets, plus $30 million for the company’s real estate assets. However, in April 2020, the agreement was terminated mutually, according to a press release.

Cresco Labs CEO and Co-Founder Charlie Bachtell said, “Our acquisition of Tryke has been impacted by regulatory delays, a decline in capital markets, and now COVID-19, which brought additional risk to this transaction. Given these events, we feel the resources previously targeted for this transaction are better invested in our existing markets, where we have high visibility and certainty of return on capital.”

3. Canopy Growth Corp. and Acreage Holdings Amend Merger Terms

Canopy Growth made global headlines and sent stocks surging in April 2019 when it announced it would acquire Acreage Holdings for $3.4 billion with one significant contingency: the United States federally legalizes cannabis. At the time, Acreage Holdings held licenses in 20 states, and shareholders were expected to receive a $300-million upfront cash payment when the deal closed. Acreage was also to gain access to Canopy’s Tweed and Tokyo Smoke brands.

Since the announcement, Canopy CEO Bruce Linton was terminated. And in June, the Canopy/Acreage deal was amended. Still contingent upon federal legalization, the value of the deal was brought down to $843 million, with an upfront payment of $37.5 million to Acreage. And the same update, Acreage CEO Kevin Murphy announced his resignation, though he still serves as chairman and sits on the board of directors. Bill Van Faasen was appointed interim CEO. 

4. Curaleaf Acquires Grassroots

In a $700-million deal, Curaleaf acquired Grassroots Cannabis in late July. According to the company’s executive chairman on CNN Business in July, the acquisition makes Curaleaf the biggest cannabis company in the world, based on its reported $1 billion in annual revenue.

Curaleaf is now operational in 23 states, with 88 operational dispensaries and 22 cultivation sites with 1.6 million square feet of cultivation capacity.

“Many of the MSOs have … retrenched into markets where they were performing well or where they have capital to build out, whereas Curaleaf has really continued to keep our foot on the accelerator and expand into more markets—given where we have a strong balance sheet and we can actually take on those projects,” according to Curaleaf CEO Joseph Lusardi.

5. Aurora Cannabis and Aphria Make More Moves Into the U.S.

Canadian cannabis powerhouses Aurora Cannabis and Aphria strengthened their footholds in the U.S. cannabis market this year.

Aurora Cannabis completed its acquisition of Reliva LLC, a hemp-derived CBD manufacturer that sells products in the United States, in May.

And this month, Aphria closed its acquisition of SweetWater Brewing Company, a U.S.-based independent craft brewer. According to a CBT report: “Aphria plans to introduce its adult-use cannabis brands, such as Broken Coast, Riff, Soleil and Good Supply, to the U.S. market as cannabis-free beverages through SweetWater products and harness SweetWater’s expertise in what [Aphria CEO and Chairman Irwin Simon] said is the growing, $29-billion craft beer market in the U.S.”

6. Trulieve Enters its Fifth State with Two Acquisitions in Pennsylvania

In September, multi-state operator Trulieve (whose most significant foothold is Florida’s medical cannabis market), announced it had entered into definitive agreements PurePenn LLC and Pioneer Leasing & Consulting LLC and Keystone Relief centers (dba Solevo Wellness), according to a press release. The deals are pending closing conditions and regulatory approvals.

The move will create Trulieve’s vertical integration in Pennsylvania—with three retail licenses and 35,000 square feet of cultivation (with plans to expand to 90,000 square feet by Q1 2021). 

According to the press release, “Under its current 100% wholesale model, PurePenn’s sizeable cultivation footprint supplies an extensive distribution network, including Solevo and other private and public medical marijuana companies.” 

7. Stem Holdings Acquires Driven Deliveries

In a data-centric rebrand, multi-state, vertically integrated operator Stem Holdings announced its definitive agreement to acquire Driven Deliveries.

The $31 million deal emphasizes a growing trend in an increasingly contactless COVID-19 economy: delivery.

“In May 2020, Driven Deliveries reported it notched an 18% increase in new consumers over April and a more than 20% increase in gross collections,” CBT reported. 

“The story of cannabis M&A in recent years has been one of market share and multi-state expansion. Now, with capital markets running dry and a global pandemic continuing to exert economic pressures across the board, the strategy is tightened. Technology assets can help build a vertically integrated portfolio in different ways than pure geographic reach,” according to CBT’s report.

8. Columbia Care Acquires The Green Solution

Multi-state, vertically integrated cannabis company Columbia Care closed its transaction with The Green Solution, one of Colorado’s largest vertically integrated operators, in September, bringing Columbia Care’s footprint to 95 facilities open or under development in the United States and European Union.

According to a press release, “The TGS acquisition establishes Columbia Care as the leader in the $1.75B Colorado market, the second largest cannabis market in the world. With 23 dispensaries, many located in the Denver metro area and tourist destinations such as Aspen, TGS supplies its own dispensaries along with its wholesale distribution network from its six operational cultivation facilities and one highly automated manufacturing facility. Additionally, a Columbia Care affiliate was recently awarded the opportunity to pursue a marijuana hospitality business license in Adams County, one of the first consumption lounges in the state.”

9. Verano Holdings Acquires AltMed

In November Verano Holdings announced it would acquire Florida-based AltMed, which would form one of the largest privately held cannabis companies in the United States, according to a CBT report.

Verano, which is vertically integrated in 12 states, made headlines in 2019 when multi-state operator Harvest Health & Recreation announced plans to acquire the company. At the time, the deal would have brought Harvest to 200 cannabis facilities in 16 states. And combined, the megadeal would have made Harvest one of the largest operators in the United States. However, in March of this year, the two companies announced their mutual termination of their Business Combination Agreement., citing COVID-19 and regulatory challenges.

The AltMed merger takes Verano in a new direction in Arizona and in Florida, where Verano had divested its assets in the Harvest transaction, Verano CEO George Archos said. “Florida was always an attractive market for us. They have a great patient base, a great population and limited licenses. In Florida, you have to basically depend on yourself in order to succeed. It’s a vertically integrated business, so you have to produce all your own flower and all your own products to sell through your stores, which is something that we’re very good at, and so is AltMed,” Archos told CBT.

10. High Times Gets Into the Retail Game

Hightimes Holdings Corp., which publishes the cannabis magazine High Times, announced on April 28 a definitive agreement to acquire 13 California cannabis retail licenses from Harvest Health & Recreation, according to a press release.

The mostly stock-based transaction would make High Times a significant retailer player in the United State’s largest cannabis market “overnight,” according to the April release. The intention is to rebrand the Harvest dispensaries to become “High Times destinations,” leveraging its iconic brand its built over more than 45 years.

However, since April, the deal has been amended to be valued at $67.5 million and include 10 dispensaries, according to Green Market Report. And in September, Hightimes lost its lease on two San Francisco retail locations due to non-payment of rent, according to SF Weekly.

Editor’s note: Bookmark this pagefor more news on the latest mergers and acquisitions in the cannabis industry.

Los Angeles, CA (December 10, 2020) – PRESS RELEASE – Today, Shawn ‘JAY-Z’ Carter officially drops the first products from his cannabis line, MONOGRAM. As announced in October 2020, the brand marks a new chapter within the cannabis space predicated on dignity, care and consistency. After honoring those three tenets with 18 months of careful strain selection and meticulous cultivation practices, MONOGRAM is finally ready to introduce its core collection of products to the world.

“Cannabis has been around for thousands of years, yet it is still an industry whose legacy of skilled craftmanship is often overlooked,” shared Carter. “I created MONOGRAM to give cannabis the respect it deserves by showcasing the tremendous hard work, time and care that go into crafting a superior smoke. MONOGRAM products are next level when it comes to quality and consistency and we’re just getting started.”

While MONOGRAM draws inspiration and adapts techniques from the cultivators who have come before, it also seeks to redefine the cannabis category by taking an individualistic approach to describing product experience. Launching with four numbered strains designated “light,” “medium,” or “heavy,” MONOGRAM offers a clear and considered sensory description for every product within the line – from preroll to handroll to flower.

The newly introduced MONOGRAM strains – No. 88, No. 96, No. 70 and No. 01 – are currently available via the brand’s three product classes:

• THE OG HANDROLL – The first product of its kind, THE OG HANDROLL (SRP: $50) takes inspiration from the smoke experience of a premium cigar, but implements a proprietary roll technique allowing the flower to burn slowly and evenly for multiple sessions. Highly trained artisan rollers break the flower down by hand and roll using a time-honored process that was specially architected by MONOGRAM Culture & Cultivation Ambassador DeAndre Watson. A true work of art and craftsmanship that cannot be automated, the roll itself burns clean and clear every time.
• LOOSIES PREROLL PACK – The LOOSIES PREROLL PACK (SRP: $40) contains four 0.4g prerolls that have been individually wrapped to foster communal smoking with ease. Each is filled with flower that has been produced to exacting standards to ensure a premium experience. The packaging itself makes a statement and reflects the magic held within: bold, convenient, top-shelf quality – wherever, whenever.
• FLOWER – Available in 2g and 4g jars, MONOGRAM FLOWER (SRP: $40 & $70) is cannabis perfected. Grown in small batches to maintain control and quality, each flower is hand-selected and hand-finished by MONOGRAM experts to provide the best possible experience, from grow to smoke. The bold packaging provides a showcase piece, while keeping the cannabis fresh and protected from UV light.

Carbon Dioxide (CO₂) extraction is a processing technique whereby CO₂ is pressurized under carefully controlled temperatures to enable extraction of terpenes, cannabinoids and other plant molecules.

Green Mill Supercritical is a Pittsburgh-based manufacturing and engineering company focused on cannabis and hemp extraction. The company offers a range of CO₂ extraction equipment where users can tune and control their extraction methods.

We spoke with Wes Reynolds, CEO of Green Mill Supercritical. Wes recently joined Green Mill as CEO and investor in the company after a long career at the Coca-Cola Company in senior sales and general management roles.

Aaron Green: Wes, thank you for taking the time to chat today. How did you get involved in Green Mill?

Wes Reynolds: I came out of a 20-year career at Coca-Cola, where I lived and worked around the world. I was a sales and general management guy with Coke, and learned a lot about running businesses and how to drive growth. I left Coke in 2017. After that successful career I wanted to be in the cannabis space. I felt like cannabis was a growing space with a lot of opportunity and a lot of misperceptions out there, particularly around the foundations of what I would call the “evil reputation” of cannabis. I just found that abhorrent and wanted to be part of changing it.

So I ran the Florida operations for Surterra, which is now called Parallel, for a year out of Tampa, and we did a great job of growing that business in Florida. As the president of the Florida operation for Surterra, I saw everything seed-to-shelf for the industry. We had a 300,000-square-foot greenhouse in Central Florida, we had dispensaries, we had all the production, distribution and all the marketing. I was really able to learn the industry top to bottom.

When I left Surterra, I started looking at various investment opportunities and thinking about what I might want to do next. I came across Green Mill out of Pittsburgh, and was really impressed with the technology that they had put together. Having run a company where we used CO₂ extraction, I had experiences with systems that didn’t work when they were supposed to or didn’t work the way they were promised, which led to lots of downtime, lots of frustration and lots of babysitting. I was impressed with Green Mill’s engineering approach and decided that I’d like to be involved with them. I originally considered just being an investor, but more and more conversations led to a greater understanding of some basic business administrative needs that they had as well. One thing led to another and I agreed to come on as the CEO, and I’m also an investor.

I’m excited about what we’re doing at Green Mill. I think that bar none, we make the best supercritical CO₂ extraction equipment out there. We continue to innovate on that every day. We want to push CO₂ beyond known limits, which is our stated goal as a company. We believe in CO₂ and we’re living our goal in that we really are pushing it beyond known limits. There are new things we’re uncovering every day where we go, “Oh, my God, I didn’t know we can do that with CO₂!” So, that’s kind of fun.

Aaron: Can you tell me just a high-level overview of how CO₂ extraction works?

Wes: A supercritical CO₂ extraction system is a collection of extraction vessels and fractionation vessels or collection vessels. In our case fractionation because we’re doing multiple collections through a single run. Then you need a system of pumps and valves and tubing, etc. to move the solvent in a supercritical state through the packed biomass, and then move the extracted compounds into a set of collection vessels. It sounds very easy. But the key to supercritical CO₂ extraction is controlling temperature, flow rate and pressure. The better you can control temperature, flow rate and pressure, the more precise of an outcome you’re going to get. For example, say you run a three-hour extraction run, and you want to run it at 3500 psi. Well, you know, a competitive system might fluctuate 300 to 400 psi on either side of 3500. Whereas our system currently fluctuates more like five to 10 psi on either side of the 3500. So, there is much more control and precision.

Our whole goal, when we’re talking about pushing CO₂ beyond known limits, is how do we continue to chase that holy grail of perfect control of temperature, flow rate and pressure? One of our advances so far is a proprietary pump, for example, that’s a liquid displacement pump that we engineer and build. It ensures a very even and consistent flow, independent of the pressure setting. So, that flow rate doesn’t change in our system compared to what you would see with another system. It sounds like a minor thing, except that at the end of a run, if you expected to get a certain set of molecules, you’re going to get a different set of molecules if your temperature and flow rate and pressure are varying, because what you’re doing is disrupting the density of the CO₂ as it flows.

It’s about building a system that is precise in that way, I think, that requires enormously skilled engineering effort and design effort on the front end, and then requires us to have advanced production and manufacturing capabilities in our shop in Pittsburgh. Our customers are clearly impressed with the levels of consistency that they’re getting out of their system.

Aaron: You talked about precision and consistency as two items. Is there anything else that makes Green Mill different?

Wes: I’m a brand guy. I believe in brands. I came out of a 20-year Coca-Cola career.

The way that the cannabis industry is going in total, in my opinion, is the consumer is going to get more and more discerning along the way. Up until this point, everybody thinks “oh, we have THC and CBD and we have intensity.” But the more sophisticated and educated consumers get, the more discerning they’re going to be about what products they want to put in their bodies.

What makes Green Mill different is that we’re building a system that allows the operator of that system to create differentiated products for the marketplace. So, it’s not simply “CBD is CBD.” It’s: what plant did you start with? How can you maintain as many of the characteristics of that plant as possible?

We’re going to create the most sophisticated tool possible to allow the operator to create products that can be differentiated in the marketplace for a discerning consumer at a premium price. That way, you can create a market where there might not have been a market before, instead of just “hey, I’ve got X pounds of biomass that I need to extract. Give me your bluntest instrument and let me extract.”

We currently make five different systems. First is the SFE Pro. We make a seven and a half liter and a 10-liter version, with two-vessel configurations of each of those. Then we have what we call a Parallel Pro, which has four 10-liter vessels and two pumps, with two streams running parallel to each other and emptying into shared collectors. It doubles the extraction rate, and you don’t expand the footprint very much. But 10-liter vessels are the biggest vessels we use. Because when you go too large with the vessel, you are giving up something in terms of the ability to control temperature, flow rate and pressure. Your efficiency starts to drop with higher vessel volume.

One of the things that makes Green Mill different is our extraction rate. Our Parallel Pro can do 145 pounds a day of biomass. We think that’s a significant amount, given the demand that’s out there for unique products. What we’re advocating for is multiple extraction systems instead of giant permanent installations of extraction systems, that end up limiting your flexibility. Big systems also prevent you from creating redundancies in your operating system. So, when your extraction system goes down, you’re done. Versus in our universe, we would say, you might want to have three or four extraction systems in different locations, running different products. Our price points are such that that’s very doable.

Aaron: How does the breakdown look between your cannabis and hemp clients?

Wes: A lot of that is legislative frankly. It has to do with what the environment is like at the moment. About 60% of our customers are small hemp farmers. And then we have the other 40% in the cannabis space that are medical or adult use producers.

CO₂ extraction has a lot of applications beyond cannabis. We have a couple of customers using our system for hops extraction, for example. We see an enormous opportunity out there for non-cannabis botanical extraction, but our primary focus is cannabis. That is what we’re designing this system to do.

We find that small hemp farmers love our system because it is reliable and very automated. We have proprietary software that operates the whole system. You load and run various “recipes,” at least we call them recipes. What you are doing is setting flow rate, setting temperatures, setting pressures, etc., then that proprietary software has an unbelievable ability to control everything through the process. I’ve talked to several different operators who have used other machines, and then found themselves on a Green Mill system and couldn’t believe how easy, but also feature-rich it was.

I talk about it like it’s like an oven, you know, you set the oven at 375 degrees. And a really good oven stays right at 375. You still need to be a good chef to be able to make that perfect cheesecake. But without that oven, your hands are tied, so you are constantly trying to check those, “is it still 375? I don’t know!” With our system, if it says 375, it holds at 375. So we’re pretty excited about that.

And we’re going to continue to innovate. For example, we have a proprietary heat exchanger that we use on our systems. It’s actually 3D printed stainless steel. It’s about a 20-pound piece of steel that’s been printed to have a special tubing shape in the center only possible with 3D printing that allows us to heat CO₂ very quickly.

Aaron: That’s very cool. I’m noticing a lot actually, the innovations in cannabis are creating these adjacent market opportunities in botanicals. So, I think that’s interesting you point that out. You mentioned terpenes are one of the things you collect out of the CO₂ extraction. Can you talk about the crude that comes off and how people are either monetizing or formulating that crude?

Wes: Our goal is to produce the “purest crude” possible. So, we want “less crude” crude. I think that we’re at the beginning of this, Aaron. We’re nowhere near the end, which is what I find so exciting, because all of our innovation, all of our continued development and all of our experimentation is designed to keep thinking, how do we push this further and further and further and get a more refined crude.

We just welcomed Jesse Turner to our team as Director of R&D, who is a well-known extraction guy in the industry. He came from Charlotte’s Web and Willie’s Reserve, and has been doing independent consulting. He’s just a rock star. He’s already off and running on experimenting with different stuff.

I think that we are just at the beginning of seeing more and more of that opportunity to help people realize, “Oh, my gosh, I did not know you could do this!” Terpenes are a good example. I think we are only scratching the surface of what terpenes can do. I mean, a cannabis plant has 400 plus molecules and we know a good bit about probably 10 or 12 of them. So, what are we going to find out about the other 390? And as we do, the Green Mill system will be ideal for separating those molecules that we don’t know today are valuable. So, I think that’s part of what we’re chasing as well.

Aaron: So where do you see CO₂ extraction fitting into the cannabis and hemp supply chain?

Wes: For any product on the market that is not a smokable flower it helps to have an extraction process. There may be some products that come out that we don’t know about yet that are not going to qualify in that category. Whether you are talking about vape cartridges, or lozenges, or gummy bears, or whatever it is, they are going to start with extract. I think what consumers want is zero adulteration of their product. So if you take any botanical product, and if it is GMO-free, does not have any pesticides, maybe it is all organic, etc. — there is real consumer appeal to that. Whether you agree with it or not, it is what consumers want.

We believe that we can continue to push CO₂ so that there’s no requirement for introduction of any other materials than just CO₂, which is a completely inert gas. It’s got no residual effect whatsoever on the product. If we get where we want to go, then eventually you are talking about a pure botanical experience.

Initial upfront capital is higher than you are going to see with ethanol and butane extraction solutions for the same size equipment, but ongoing operating costs of those are much higher, when you weigh it out over a period of time. I think what we are going to find is that people are going to keep coming to CO₂ because they realize there are things they can do with it that they can’t do any other way.

The end consumer is really who we want to keep in mind. I think for a long time, this industry was very demand driven. “I have X acres of cannabis product, whether that’s hemp, sativa, indica, whatever it is, and I need to extract this many pounds a day over this period of time.” And we keep asking the question, well, who’s going to buy that product on the other side? What do you want it to look like when you put it out on the market? As opposed to how much raw plant matter do you have? What’s the demand? And that was a difficult conversation. We’re starting to see more people come around to that conversation now. But I think that’s the question we want to keep answering is how do we create those products that are differentiated in the marketplace and that can pass muster in any regulatory environment? People are going to want to know what’s in their product.

Aaron: What trends are you following in the industry?

Wes: As the CEO, I’m particularly interested in the overall development of the landscape of the industry in terms of who’s playing, who’s winning, what’s happening with legislation, MSOs versus SSOs. I’m also interested in the international environment. We have a good bit of interest from multiple countries that have either ordered Green Mill systems or are talking to us about Green Mill systems, including Canada and Latin American countries, some European countries, Australia and New Zealand.“We’re really committed to educational efforts with a very rigorous scientific foundation, but in language that is approachable and people can understand.”

The trends that I’m particularly interested in are more on the business side of the equation, in terms of how this business is going to shake out particularly from a capitalization perspective, as banking laws continue to change, which is a big deal, and the legislative environment gets a little more predictable and a little more consistent.

Aaron: Okay, last question. So what are you personally interested in learning more about?

Wes: Everything, is the short answer! I constantly run this little challenge of trying to understand enough of the science. I’m not a scientist, I’m a sales guy. That was how I grew up: general management and sales. I’ve made my living over many years being wowed by the pros. Depending on the scientists and the very specialized folks to help provide the right answers to things. I’m fascinated by the chemistry and I’m fascinated by the mechanical engineering challenges of what we do at Green Mill. So, I’m always interested in learning about that.

I think there’s a need, and it is helpful to be able to talk about those things in language that the layperson can understand, as opposed to explaining everything in scientific language. I think what I am trying to do is help people put it into a language that they can get, but that is not simple. Language that is correlative to reality. I think there’s so much misunderstanding about how these things work and what’s happening. We’re really committed to educational efforts with a very rigorous scientific foundation, but in language that is approachable and people can understand.

Aaron: Okay, that’s it. Thank you for your time Wes!

While the mergers and acquisitions (M&A) space in the cannabis industry has significantly slowed in 2020, it certainly hasn’t stopped—not even during a pandemic.

According to S&P Global Market Intelligence, “a drop in company valuations complicated by the coronavirus-triggered capital squeeze” were the two major reasons for the slowdown. Still, S&P Global reports U.S. and Canadian cannabis and cannabis-related companies completed 124 deals in 2020, worth a combined $615.1 million—compared to 249 deals in 2019 and 324 deals in 2018.

We also learned this year, according to a Department of Justice (DOJ) whistleblower, that “U.S. Attorney General William Barr was motivated by his personal dislike of the cannabis industry when he launched multiple Antitrust Division merger investigations into nearly a dozen cannabis deals last year,” Cannabis Business Times reported in July. According to Eric Berlin, co-chair of Denton’s Cannabis Practice, “Many of the cannabis mergers under investigation did not get closed … due to these additional costs and time delays, and now, not only are the companies involved left with little to no recourse, but the DOJ’s actions have dramatically slowed the M&A activity in the industry.”

However, recovering valuations and renewed investor interest are expected to increase deals in 2021, according to the S&P Global. Not to mention, it was a monumental year for cannabis legalization in the U.S. And, cannabis businesses in most states and provinces were considered essential services. As we wait to see what 2021 deal-making brings, we’ve rounded up some of the most notable deals that closed, and those that fell through, in 2020.

1. Cresco Labs Acquires Origin House

Before the coronavirus pandemic, Cresco Labs officially closed its acquisition of Canada-based cannabis company Origin House. The deal was originally valued at C$1.1 billion, though the deal’s value ended up being lower amidst declining stocks and antitrust review delays. Perhaps the biggest cannabis transaction in the year, the move paved the way for Cresco Labs’ entry into the United States’ largest cannabis market: California.

“The acquisition of Origin House makes Cresco a leading wholesale distributor in California, selling into over 575 dispensaries, representing approximately 65% of California’s storefront dispensaries. Origin House’s Continuum distribution platform distributes 13 third-party brands, including Kings Garden,” according to a press release.  

Cresco Labs’ brands are currently distributed in six states, including Arizona, Illinois, Massachusetts, New York, Ohio and Pennsylvania.

2. Cresco Labs Terminates Tryke Companies Purchase Agreement

In September 2019, Cresco Labs announced its intention to acquire Tryke Companies, which included the Reef Dispensary portfolio in Nevada and Arizona. The purchase consideration at the time was $252.5 million for Tryke’s operating assets, plus $30 million for the company’s real estate assets. However, in April 2020, the agreement was terminated mutually, according to a press release.

Cresco Labs CEO and Co-Founder Charlie Bachtell said, “Our acquisition of Tryke has been impacted by regulatory delays, a decline in capital markets, and now COVID-19, which brought additional risk to this transaction. Given these events, we feel the resources previously targeted for this transaction are better invested in our existing markets, where we have high visibility and certainty of return on capital.”

3. Canopy Growth Corp. and Acreage Holdings Amend Merger Terms

Canopy Growth made global headlines and sent stocks surging in April 2019 when it announced it would acquire Acreage Holdings for $3.4 billion with one significant contingency: the United States federally legalizes cannabis. At the time, Acreage Holdings held licenses in 20 states, and shareholders were expected to receive a $300-million upfront cash payment when the deal closed. Acreage was also to gain access to Canopy’s Tweed and Tokyo Smoke brands.

Since the announcement, Canopy CEO Bruce Linton was terminated. And in June, the Canopy/Acreage deal was amended. Still contingent upon federal legalization, the value of the deal was brought down to $843 million, with an upfront payment of $37.5 million to Acreage. And the same update, Acreage CEO Kevin Murphy announced his resignation, though he still serves as chairman and sits on the board of directors. Bill Van Faasen was appointed interim CEO. 

4. Curaleaf Acquires Grassroots

In a $700-million deal, Curaleaf acquired Grassroots Cannabis in late July. According to the company’s executive chairman on CNN Business in July, the acquisition makes Curaleaf the biggest cannabis company in the world, based on its reported $1 billion in annual revenue.

Curaleaf is now operational in 23 states, with 88 operational dispensaries and 22 cultivation sites with 1.6 million square feet of cultivation capacity.

“Many of the MSOs have … retrenched into markets where they were performing well or where they have capital to build out, whereas Curaleaf has really continued to keep our foot on the accelerator and expand into more markets—given where we have a strong balance sheet and we can actually take on those projects,” according to Curaleaf CEO Joseph Lusardi.

5. Aurora Cannabis and Aphria Make More Moves Into the U.S.

Canadian cannabis powerhouses Aurora Cannabis and Aphria strengthened their footholds in the U.S. cannabis market this year.

Aurora Cannabis completed its acquisition of Reliva LLC, a hemp-derived CBD manufacturer that sells products in the United States, in May.

And this month, Aphria closed its acquisition of SweetWater Brewing Company, a U.S.-based independent craft brewer. According to a CBT report: “Aphria plans to introduce its adult-use cannabis brands, such as Broken Coast, Riff, Soleil and Good Supply, to the U.S. market as cannabis-free beverages through SweetWater products and harness SweetWater’s expertise in what [Aphria CEO and Chairman Irwin Simon] said is the growing, $29-billion craft beer market in the U.S.”

6. Trulieve Enters its Fifth State with Two Acquisitions in Pennsylvania

In September, multi-state operator Trulieve (whose most significant foothold is Florida’s medical cannabis market), announced it had entered into definitive agreements PurePenn LLC and Pioneer Leasing & Consulting LLC and Keystone Relief centers (dba Solevo Wellness), according to a press release. The deals are pending closing conditions and regulatory approvals.

The move will create Trulieve’s vertical integration in Pennsylvania—with three retail licenses and 35,000 square feet of cultivation (with plans to expand to 90,000 square feet by Q1 2021). 

According to the press release, “Under its current 100% wholesale model, PurePenn’s sizeable cultivation footprint supplies an extensive distribution network, including Solevo and other private and public medical marijuana companies.” 

7. Stem Holdings Acquires Driven Deliveries

In a data-centric rebrand, multi-state, vertically integrated operator Stem Holdings announced its definitive agreement to acquire Driven Deliveries.

The $31 million deal emphasizes a growing trend in an increasingly contactless COVID-19 economy: delivery.

“In May 2020, Driven Deliveries reported it notched an 18% increase in new consumers over April and a more than 20% increase in gross collections,” CBT reported. 

“The story of cannabis M&A in recent years has been one of market share and multi-state expansion. Now, with capital markets running dry and a global pandemic continuing to exert economic pressures across the board, the strategy is tightened. Technology assets can help build a vertically integrated portfolio in different ways than pure geographic reach,” according to CBT’s report.

8. Columbia Care Acquires The Green Solution

Multi-state, vertically integrated cannabis company Columbia Care closed its transaction with The Green Solution, one of Colorado’s largest vertically integrated operators, in September, bringing Columbia Care’s footprint to 95 facilities open or under development in the United States and European Union.

According to a press release, “The TGS acquisition establishes Columbia Care as the leader in the $1.75B Colorado market, the second largest cannabis market in the world. With 23 dispensaries, many located in the Denver metro area and tourist destinations such as Aspen, TGS supplies its own dispensaries along with its wholesale distribution network from its six operational cultivation facilities and one highly automated manufacturing facility. Additionally, a Columbia Care affiliate was recently awarded the opportunity to pursue a marijuana hospitality business license in Adams County, one of the first consumption lounges in the state.”

9. Verano Holdings Acquires AltMed

In November Verano Holdings announced it would acquire Florida-based AltMed, which would form one of the largest privately held cannabis companies in the United States, according to a CBT report.

Verano, which is vertically integrated in 12 states, made headlines in 2019 when multi-state operator Harvest Health & Recreation announced plans to acquire the company. At the time, the deal would have brought Harvest to 200 cannabis facilities in 16 states. And combined, the megadeal would have made Harvest one of the largest operators in the United States. However, in March of this year, the two companies announced their mutual termination of their Business Combination Agreement., citing COVID-19 and regulatory challenges.

The AltMed merger takes Verano in a new direction in Arizona and in Florida, where Verano had divested its assets in the Harvest transaction, Verano CEO George Archos said. “Florida was always an attractive market for us. They have a great patient base, a great population and limited licenses. In Florida, you have to basically depend on yourself in order to succeed. It’s a vertically integrated business, so you have to produce all your own flower and all your own products to sell through your stores, which is something that we’re very good at, and so is AltMed,” Archos told CBT.

10. High Times Gets Into the Retail Game

Hightimes Holdings Corp., which publishes the cannabis magazine High Times, announced on April 28 a definitive agreement to acquire 13 California cannabis retail licenses from Harvest Health & Recreation, according to a press release.

The mostly stock-based transaction would make High Times a significant retailer player in the United State’s largest cannabis market “overnight,” according to the April release. The intention is to rebrand the Harvest dispensaries to become “High Times destinations,” leveraging its iconic brand its built over more than 45 years.

However, since April, the deal has been amended to be valued at $67.5 million and include 10 dispensaries, according to Green Market Report. And in September, Hightimes lost its lease on two San Francisco retail locations due to non-payment of rent, according to SF Weekly.

Editor’s note: Bookmark this pagefor more news on the latest mergers and acquisitions in the cannabis industry.

The cannabis industry is growing and evolving at an unprecedented pace and regulators, consumers and businesses continually struggle to keep up.

Cannabis businesses: How do you maintain an edge on the market, avoid costly mistakes?

Case Study: Costly Facility Build Out Oversights

David Vaillencourt will be joining a panel discussion, Integrated Lifecycle of Designing a Cultivation Operation, on December 22 during the Cannabis Quality Virtual Conference. Click here to register. A vertically integrated multi-state operator wants to produce edibles. The state requires adherence to food safety practices (side note – even if the state did not, adherence to food safety practices should be considered as a major facility and operational requirement). They are already successfully producing flower, tinctures and other oil derivatives. Their architect and MEP firm works with them to design a commercial kitchen for the production of safe edibles. The layout is confirmed, the equipment is specified – everything from storage racks, an oven and exhaust hoods, to food-grade tables. The concrete is poured and walls are constructed. The local health authority comes in to inspect the construction progress, who happens to have a background in industrial food-grade facilities (think General Mills). They remind the company that they must have three-compartment sinks with hot running water for effective cleaning and sanitation, known as clean-out-of-place (COP). The result? Partial demolition of the floor to run pipeline, and a retrofit to make room for the larger sinks, including redoing electrical work and a contentious team debate about the size of the existing equipment that was designed to fit ‘just right.’

Unfortunately, this is just one more common story our team recently witnessed. In this article, I outline a few recommendations and a process (Quality by Design) that could have reduced this and many other issues. For some, following the process may just be the difference between being profitable or going out of business in 2021.

The benefits of Quality by Design are tangible and measurable:

1. Reduce mistakes that lead to costly re-work
2. Mitigate inefficient operational flow
3. Reduce the risk of cross-contamination and product mix-ups. It happens all the time without carefully laid out processes.
4. Eliminate bottlenecks in your production process
5. Mitigate the risk of a major recall.

The solution is in the process

Regardless of whether you fall in the category of a food producer, manufacturer of infused products (MIP), food producers, re-packager or even a cultivator, consider the following and ask these questions as a team.

People

For every process, who is performing it? This may be a single individual or the role of specific people as defined in a job description.

Does the individual(s) performing the process have sufficient education and training? Do you have a diverse team that can provide different perspectives? World class operations are not developed in a vacuum, but rather with a team. Encourage healthy discourse and dialogue.

Process

Is the process defined? Perhaps in a standard operating procedure (SOP) or work instruction (WI). This is not the general guidance an equipment vendor provided you with, this is your process.

How well do you know your process? Does your SOP or WI specify (with numbers) how long to run the piece of equipment, the specification of the raw materials used (or not used) during the process, and what defines a successful output?

Do you have a system in place for when things deviate from the process? Processes are not foolproof. Do not get hung up on deviations from the process, but don’t turn a blind eye to them. Record and monitor them. In time, they will show you clear opportunities for improvement, preventing major catastrophes.

Materials

What are the raw materials being used? Where are they coming from (who is your supplier and how did you qualify them)?

Start with the raw materials that create your product or touch your product at all stages of the process. We have seen many cases where cannabis oils fail for heavy metals, specifically lead. Extractors are quick to blame the cultivator and their nutrients, as cannabis is a very effective phytoremediator (it uptakes heavy metals and toxins from soil substrate). The more likely culprit – your glassware! Storing cannabis oil, both work in process or final product in glass jars, while preferred over plastic, requires due diligence on the provider of your glassware. If they change the factory in which it is produced, will you be notified? Stipulate this in your contract. Don’t find yourself in the next cannabis lead recall that gets the attention of the FDA.

Savings is gained through simple control of your raw materials. Variability in your raw material going into the extractor is inevitable, but the more you can do to standardize the quality of your inputs, the less work re-formulating needs to be done downstream. Eliminate the constant need to troubleshoot why yields are lower than expected, or worst case, having to rerun or throw an entire batch out because it was “hot” (either too much THC in the hemp/CBD space or pesticides/heavy metals). These all add up to significant downstream bottlenecks – underutilized equipment, inefficient staff (increase in labor cost) all because of a lack of upstream controls. Use your current process as a starting point, but implement a quality system to drive improvement in operational efficiency and watch your top line grow while your bottom-line decreases.

Have you tested and confirmed the quality of your raw material? This isn’t just does it have THC and is it cannabis, but is it a certain particle size, moisture level, etc.? Again, define the quality of your raw materials (specifications) and test for it.

Remember – ranges are your friend. It is much better to say 9-13% moisture than “about 10%”. For your most diligent extractor, 11% will be unacceptable, but for a guy that just wants to get the job done, 13% just may do!

Test your final product AFTER the process. Again, how does it stack up against your specifications? You may need to have multiple specifications based on different types of raw material. Perhaps one strain with a certain range of cannabinoids and terpenes can be expected for production.

Review the data and trend it. Are you getting lower yields than normal? This may be due to an issue with the equipment, maybe a blockage has formed somewhere, a valve is loose, and simple preventive maintenance will get you back up and running. Or, it could be that the raw biomass quality has changed. Either way, having that data available for review and analysis will allow you to identify the root cause and prevent a surprise failure of your equipment. Murphy’s law applies to the cannabis industry too.

1. You are able to predict and prevent most failures before they occur
2. You increase the longevity of your equipment
3. You are able to predict with a level of confidence – imagine estimating how much product you will product next month and hitting that target – every time!
4. Business risks are significantly mitigated – a process that spews out metal, concentrates heavy metals or does not kill microbes that were in the raw material is an expensive mistake.
5. Your employees don’t feel like they are running around with their hair on fire all the time. It’s expensive to train new employees. Reduce your turnover with a less stressed-out team.

Takeaways

Maintaining a competitive edge in the cannabis industry is not easy, but it can be made easier with the right team, tools and data. Our recommendations boil down to a few simple steps:

1. Make sure you have a chemical or mechanical engineer to understand, optimize and standardize your process (you should have one of these on staff permanently!)
2. Implement a testing program for all raw materials
   1. Test your raw materials – cannabis flower, solvents, additives, etc. before using. Work with your team to understand what you should and should not test for, and the frequency for doing so. Some materials/vendors are likely more consistent or reliable than others. Test the less reliable ones more frequently (or even every time!)
3. Test your final product after you extract it – Just because your local regulatory body does not require a certain test, it does not mean you should not look for it. Anything that you specified wanting the product to achieve needs to be tested at an established frequency (and this does not necessarily need to be every batch).
4. Repeat, and record all of your extraction parameters.
5. Review, approve and set a system in place for monitoring any changes.

Congratulations, you have just gone through the process of validating your operation. You may now begin to realize the benefits of validating your operation, from your personnel to your equipment and processes.

This week, the U.S. House of Representatives passed HR 3797: The Medical Marijuana Research Act, which facilitates clinical cannabis research by establishing a process so that authorized scientists may access flowers and other products manufactured in accordance with state-approved marijuana programs. Elsewhere, in New Jersey, lawmakers agreed on legislation to implement the state’s adult-use cannabis program, with a vote expected later this month.

Here, we’ve rounded up the 10 headlines you need to know before this week is over.

• Federal: Members of the U.S. House of Representatives voted Dec. 9 in favor of HR 3797: The Medical Marijuana Research Act, which facilitates clinical cannabis research by establishing a process so that authorized scientists may access flowers and other products manufactured in accordance with state-approved marijuana programs. It also ends the decades-long monopoly on the cultivation of cannabis for FDA-approved research by requiring federal agencies to license multiple manufacturers in addition to the University of Mississippi. Read more
• New Jersey: New Jersey lawmakers have reached a deal on legislation to implement an adult-use cannabis program in the state. The Senate Judiciary Committee is expected to take up the bill on Dec. 14, the news outlet reported, and the legislation will go before the full Senate for a vote on Dec. 17. Read more
• Nebraska: Sen. Anna Wishart is working on language to legalize adult-use cannabis that will be added to a medical cannabis legalization initiative that is planned for the state’s 2022 ballot. “In light of the successful ballot measures in South Dakota and yesterday’s vote in the House of Representatives, our team is drafting a ballot initiative to legalize cannabis for adult use,” Wishart wrote in a Dec. 5 Facebook post. Read more
• California: The Humboldt Community Business Development Center (HCBDC) has partnered with the California Center for Rural Policy at Humboldt State University and Sonoma State University for a comprehensive look into the impact of cannabis farming, manufacturing, distribution and retail sales on the overall economy of a research area which includes the legendary Emerald Triangle (Humboldt, Trinity and Mendocino counties). The HCBDC will develop the study through a grant from the California Bureau of Cannabis Control. Read more
• The Cannabis Advisory Committee recommended regulatory changes this week that would help licensed cannabis businesses compete with the illicit market and face new challenges related to the ongoing COVID-19 pandemic. The committee held public hearings throughout 2020 and made 17 total recommendations for improving the state’s cannabis industry. Read more
• Minnesota: A University of Minnesota research team has developed a genetic test that can predict whether cannabis will produce mostly CBD or THC, having broad implications for both cannabis and hemp. The team’s findings were recently published in the American Journal of Botany. Read more
• Florida: Sen. Randolph Bracy has announced that he will introduce a bill during the 2021 legislative session to make it easier for people to clear misdemeanor convictions involving the possession and distribution of less than 20 grams of cannabis. The legislation would not automatically expunge records, but it would allow thousands of people to clear their criminal records and waive all court fees to do so. Read more
• New Mexico: A state advisory board recommended this week that the state health secretary consider allowing licensed medical cannabis cultivators to grow more plants to alleviate concerns about the high cost of medical cannabis and the lack of variety. The board voted on the recommendation in response to a petition seeking to either eliminate the limit or significantly increase the number of plants each cultivator can grow. Read more
• Illinois: Multistate cannabis operator Cresco Labs has announced the relaunch and availability of its cannabis-infused chocolates line from its Mindy’s Chef Led Artisanal Edibles brand in dispensaries across Illinois. Previously introduced to the state’s medical market in 2016, the line is now available for the first time to recreational customers. Read more
• Canada: Licensed producer Canopy Growth Corp. will shutter roughly 17% of its indoor cultivation space and all of its outdoor cultivation sites in Canada, which will result in layoffs for about 220 employees. The closures are part of a four-pronged approach that CEO David Klein and other company executives outlined last month to improve margins and turn a profit by the end of the fiscal year 2022. Read more