Want to Invest in Colorado after HB19-1090? Businesses to watch

Colorado’s HB19-1090 went into effect Nov. 1, effectively opening the state’s cannabis industry to out-of-state investment – and outsiders are already moving in.

So far, we have seen a total of $421 million in Colorado acquisitions, and we expect more transactions to occur as businesses seek new capital for growth, capture some value after years of entrepreneurship in a newly liquid market or join forces with larger players.

Previous regulations capped the number of out-of-state owners at 15, forcing operators to self-fund their growth.

Denver-based Medicine Man Technologies (OTC: MDCL), as detailed in our recent Deep Dive, raised capital from Florida-based Dye Capital to vertically integrate 11 other operators in Colorado across the entire supply chain. MDCL still needs to raise another $77 million to $111 million in cash to complete the deals as currently structured.

New York-headquartered Columbia Care plans to acquire The Green Solution, a large, vertically integrated EBITDA-positive Colorado operator, giving Columbia positive EBITDA and new brands in exchange for equity.

Here are some larger and/or respected private operators in Colorado that might attract the interest of outside investors now that the door is open.

This is not an exhaustive list, nor have we contacted these firms, but they are businesses to watch as targets or potential consolidators.

Will they use newly available capital because of HB19-1090 to fund innovative business models or to provide cash flow to larger entities burning cash in other states? Or will there be a rush of capital into a currently profitable and formerly closed market that pressures margins across the board?

We’ll be watching.

Company Type # of Dispensaries Notes
Buddy Boy Retail 7
The Clinic/The Lab Vertically integrated 6 Also operates two MMJ locations in Illinois
Good Chemistry Vertically integrated 5 Also has one medical license in Massachusetts
Lightshade Retail 9
LivWell Vertically integrated 16 Family owned; historically a public supporter of HB19-1090
Native Roots Vertically integrated 20
Terrapin Care Station Vertically integrated 6 Historically against HB19-1090
Green Dot Labs Processor Family owned
1906 Edibles Infused products Nuka Enterprises
Coda Signature Infused products Grow Foundry California
Love’s Oven Infused products
Mary’s Medicinals Infused products
Wana Brands Infused products Mountain High Products