Stiiizy, California’s largest cannabis retail chain, has expanded its footprint with the $25 million acquisition of the now-defunct conglomerate Gold Flora.
The deal, finalized on Oct. 23, includes leases and licenses for 12 cannabis stores, according to SFGate.
Stiiizy officially took over the stores on Dec. 9, bringing its total number of locations to 58 in California and three in Michigan, company President Tak Sato told SFGate.
The acquisition solidifies Stiiizy’s dominance in the California cannabis market, far outpacing its closest competitor Catalyst Cannabis, which operates 33 locations, according to Department of Cannabis Control records.
Stiiizy doubles down on California cannabis market
The acquisition of Gold Flora’s stores is a bold move in a challenging market.
California’s legal cannabis industry, still the largest in the U.S. by a wide margin has faced declining sales and financial struggles. A recent tax increase sent quarterly sales tumbling to a five-year low.
As for Gold Flora, the company entered receivership earlier this year after defaulting on an $11.5 million loan.
Gold Flora previously had absorbed several cannabis companies, including The Parent Co., a high-profile startup linked to Jay-Z, which burned through $575 million before a merger with Gold Flora.
Marijuana market leader Stiiizy attracts controversy
Stiiizy’s rapid growth has not been without controversy.
Allegations of selling cannabis tainted with illegal pesticides and accusations of involvement in illegal sales networks have followed the brand, though Stiiizy has denied the claims.
Teens have also sued the company, alleging that highly potent vaporizers led to psychosis.
The acquisition had a minor hiccup when Stiiizy reduced its initial $26.45 million bid after it found out licenses for stores in San Jose, Costa Mesa and Santa Barbara could not be transferred.
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This sparked a legal challenge from competitor Sweet Leaf, which argued that its $26.3 million bid should be considered the highest.
However, a Los Angeles County judge upheld Stiiizy’s purchase, allowing the company to proceed with the acquisition.
