Cannabis multistate operator PharmaCann is evidently exiting Colorado after it informed state authorities it will close its Denver cultivation facility.
The Chicago-based MSO will lay off 132 workers and shut down one of Colorado’s largest licensed cultivation operations by May 20, The Denver Post reported.
What happened to marijuana MSO PharmaCann in Colorado?
PharmaCann, considered one of the largest privately held vertically integrated cannabis companies in the country, entered the Colorado market in 2022 through its all-stock acquisition of LivWell Enlightened Health.
Later, it expanded by acquiring boutique retailer The Clinic.
But the company appears to have overextended itself. Cannabis valuations have plummeted since 2022, and Colorado in particular has been hit hard by the price compression shrinking markets across the country.
Wholesale flower prices, which peaked at $1,721 per pound in 2021, dropped to $608 per pound as of March 9, Westword reported.
Recently, PharmaCann has faced financial difficulties, including missed lease payments, and has begun divesting its Colorado operations.
Vireo Growth is now Colorado’s largest cannabis retailer
Not every MSO sees Colorado as tough going.
In December, PharmaCann agreed to sell its 17 LivWell retail stores, along with intellectual property and inventory to Minneapolis-based Vireo Growth for $49 million in stock.
And during an earnings call last week, Vireo CEO John Mazarakis hinted that more buys could soon follow.
But notably, Vireo did not acquire cultivation facilities, reflecting a broader industry trend.
With wholesale prices plummeting, it has become more cost-effective to purchase cannabis on the open market rather than grow it in-house, experts told The Post.
Vireo Growth has also expanded its production capacity through other acquisitions, including a $111 million credit bid for Denver-based Schwazze, which gave it control of two indoor grow facilities and an outdoor operation.
The company now operates about 55 stores in Colorado, making it the state’s largest marijuana retailer.
