It wasn't so long ago that Verano Holdings, an Illinois cannabis company with properties in several states, was looking to join up with Arizona marijuana juggernaut Harvest Health and Recreation. The proposed $850 million merger between the two firms would have created one of the largest cannabis companies in the U.S.
But the deal fell through last March, amid concerns about the pandemic as well as regulatory hurdles.
Post-legalization, though, Verano has been making big moves in Arizona, pushing into the market on its own via a steady stream of acquisitions.
The latest was announced last week. The company will acquire the rights to manage Local Joint, the east Phoenix dispensary located at 4201 E. University Drive, from its current manager, Flower Launch LLC. According to a release from Verano, it was a $17 million transaction — $13.5 million in cash, and another $3.5 million in stock. The deal is expected to close in the next few months.
That's in addition to the four Arizona dispensaries Verano scooped up in February: Emerald Dispensary in north Phoenix and all three Territory locations (Mesa, Chandler, and Gilbert). Verano also acquired MUV dispensary in Phoenix when it acquired AltMed back in November.
Add it up, and that's six dispensaries in Arizona for Verano. David Spreckman, senior director at the firm, tells New Times that gives it the third-biggest retail footprint in the state. Harvest and Curaleaf are the top two operators in Arizona in terms of locations.
"With a larger group, we’ll have access to more high-quality product and high-quality flower and economies of scale," says Territory's CEO James Christensen of being acquired. "That, plus access to the talent at these other great shops [MUV, Emerald, The Local Joint] with a pretty good history here in the Valley."
Will Territory's name change?
"We don’t have plans in that level of detail just yet," Christensen says. "We're still working through the org chart. I’m sure Local Joint loves their name; we love our branding and what we built. But with a deal like this, you have to put emotions to the side with that stuff."
John Vatistas, Flower Launch's president, said in a release about the sale, “We take real pride in having transformed Local Joint from its prior iteration to the present highly active, efficient operation which attracted the notice of a sophisticated operator like Verano.”
Verano's CEO and cofounder George Archos said Arizona is a "core market" for the company and will remain so going forward. "We’ve been fortunate to find like-minded partners and operators to expand our Verano family in Arizona in support of our objective to capture a leading position in the market,” Archos said.