Columbia Care Inc., a leader in the burgeoning cannabis industry, has agreed to acquire Green Leaf Medical LLC for $240 million, the companies announced Tuesday.
The deal will give Columbia Care a strong foothold in Virginia, where Green Leaf Medical operates an 82,000-square-foot medical marijuana production facility in the Swansboro neighborhood of South Richmond that began cultivation operations in May and opened its retail operations in November.
Maryland-based Green Leaf secured approval in 2018 from the Virginia Board of Pharmacy to be the lone medical cannabis licensee for an area that includes the Richmond region and parts of Southside Virginia.
New York-based Columbia Care holds the license for the Hampton Roads region, where it has its own production facility in Portsmouth.
“In Maryland and Virginia, Green Leaf materially expands our wholesale footprint, retail dispensary network and the scope of our home delivery services,” said Columbia Care CEO Nicholas Vita in a news release.
“It accelerates our growth and profitability in Virginia, Ohio and Pennsylvania. No organization in the industry will be better positioned to serve patients and customers in the mid-Atlantic than Columbia Care,” Vita said.
Besides Virginia, Green Leaf has operations in Maryland, Ohio and Pennsylvania.
Columbia Care has licenses in 18 jurisdictions with 107 facilities, including 80 dispensaries and 27 cultivation and manufacturing facilities.
The deal is expected to close in the summer.
Columbia will pay $240 million, consisting of a cash payment of $45 million with the balance of $195 million in Columbia Care stock.
Columbia Care intends to retain the entire Green Leaf management team, and Green Leaf CEO and co-founder Phillip Goldberg is expected to join Columbia Care’s board of directors.
“Columbia Care is the ideal partner to take Green Leaf through its next phase of growth,” Goldberg said in the release. “In conjunction with its existing scale and market-leading strategy across its portfolio, Columbia Care’s dedication to ensuring optimal accessibility and product quality aligns with our values and will improve our ability to serve and expand our customer base throughout the mid-Atlantic.”
Before the acquisition deal was announced, Green Leaf was the largest cultivator in the state, and served as Virginia’s exclusive retailer in 20 counties in central Virginia, offering home delivery throughout the state.
Each license holder is entitled to operate one co-located cultivation and dispensary facility in their authorized region, in addition to five stand-alone dispensaries.
The release suggests that the cannabis industry anticipates impending recreational legalization in Virginia. Gov. Ralph Northam on Nov. 16 voiced his support for legislation to legalize marijuana for adult use in Virginia.
“Our Commonwealth has the opportunity to be the first state in the South to take this step, and we will lead with a focus on equity, public health, and public safety,” Northam said in a news release.
Since 2012, 15 states and the District of Columbia have legalized recreational marijuana use, while 36 states, including Virginia, have legalized medical use.