How much does a vertical marijuana license fetch in sizzling Massachusetts? Try $100 million-plus.
Marijuana multistate operator Jushi Holdings signed a definitive agreement to enter Massachusetts by acquiring vertically integrated Nature’s Remedy for up to $110 million, a price reflecting the strength and potential of that market.
By comparison, Cresco Labs recently agreed to buy a vertical operation in Massachusetts for $90 million.
“Our entrance into Massachusetts will mark the seventh state where we operate cannabis assets and the third state where we are vertically integrated,” Jim Cacioppo, CEO of Florida-based Jushi, said in a news release.
He said the agreement will also offer opportunities to expand.
Nature’s Remedy has a 50,000-square-foot cultivation and processing center and operates two dispensaries in Massachusetts.
The company’s flower canopy currently encompasses 19,500 square feet, and there are plans to expand that to 31,000 square feet in the second half of this year. Nature’s Remedy also owns 10 acres of land in another part of Massachusetts for a potential facility.
The agreement come as adult-use sales in Massachusetts are skyrocketing.
The recently released 2021 Marijuana Business Factbook projects that recreational marijuana sales will reach $1.1 billion-$1.4 billion this year, compared with an estimated $625 million-$775 million in 2020.
Massachusetts’ medical cannabis market generates an additional quarter-billion-dollar in sales a year.
Under the terms of the agreement to acquire Nature’s Remedy, Jushi will pay $40 million in cash, $55 million in stock and a $5 million promissory note. Jushi also agreed to issue up to an additional $10 million in stock upon certain conditions.
The transaction is expected to be completed in the second half of this year, pending regulatory approvals and other conditions.