Green Thumb Industries (GTII.C) announced it has closed on its acquisition of Dharma Pharmaceuticals.
Dharma has one of only five medical licenses for cannabis in the state of Virginia, and is licensed to grow, process and retail cannabis directly to patients. Through the acquisition, Green Thumb is getting Dharma’s existing production facility and retail dispensary located in Abingdon, Virginia and the opportunity to open up five additional dispensaries in the state.
Virginia’s law authorizing adult recreational cannabis use, passed back in April, went into effect yesterday, however adult-use sales are not expected to commence until January 2024.
“In a limited-license market with a population of nearly 8.5 million people, this transaction is a major win for our shareholders, and we are ready to welcome Dharma officially to the Green Thumb team,” stated Green Thumb CEO and Founder Ben Kovler. “Expanding into the first state to pass adult use cannabis in the Southeastern U.S. is an important milestone for Green Thumb and we are excited for the future.”
Plans for the acquisition were announced back in May, not long after the legislation legalising cannabis passed. Terms of the acquisition were not included in the announcement. Now that the acquisition is complete, Green Thumb will have a presence in 13 states, including California, Ohio, New York, Florida, Illinois, and many others.
After announcing the plan to acquire Dharma, Kovler noted “Change is happening. We are seeing sweeping cannabis reform across the country in favor of expanded access. This momentum has finally reached the first state south of the Mason-Dixon line to ratify adult-use cannabis sales and we are excited to work with the Dharma team in Virginia. This industry will create consequential economic opportunities and social change in a part of the country that remains void of legal access to cannabis today. We look forward to serving Virginia’s current medical patients, and future adult-use consumers, while supporting the tremendous positive impact that the legal cannabis industry can have on local communities. We will continue to execute on our ‘enter, open, scale’ strategy to expand our production capabilities to improve access to Green Thumb’s branded products and retail experiences for both medical patients and consumers across the country.”
Last month, they also expanded their presence in the Massachusetts market by acquiring Liberty Compassion. The acquisition added cultivation and production capacity and two operating medical cannabis dispensaries to their operation, and allowed them to increase the availability of their branded products.
Back in May, I wrote about plans to open a dispensary in Brookline, Massachusetts, and noted that highly educated suburbs full of soccer moms coming to accept (and partake in) cannabis use has been a big factor in the recent success of pushes to legalize cannabis.
Virginia is another example of this. Virginia ranks 6th for adults with a bachelor’s degree, and if you get into the northern part of the state (the DC suburbs) I would expect that number to higher. Getting early market penetration with this growing cannabis market has potential, but they will have to wait till 2024 to really see the benefits.
Following the news, Green Thumb Initiative shares fell $1.07 and are currently trading at $39.85.
