Less than three weeks after announcing a $110 million expansion in Virginia, where adult-use marijuana sales are expected to begin sometime next year, Curaleaf Holdings’ purchase of rival Cannabis Company Holdings in the state has closed.
The reason why New York’s Curaleaf won’t buy a straight compound medical marijuana permit? A competitive proposal for a total of $160 million has been made, Curaleaf said in a press release on Friday.
The Curaleaf deal, which was finalized on December 1, was supposed to close in the first quarter of 2026 and include five existing Cannabist stores in the Richmond, Virginia area, as well as an 83,000-square-foot cultivation operation, with the right to open a sixth store.
But on Thursday, the same day that President Donald Trump issued an order destating marijuana under federal law, Massachusetts Cannabist said it would sell its Virginia license to an affiliate of the Millstreet Credit Fund for $130 million, “subject to adjustments.”
Millstreet is a Boston-based hedge fund, according to Securities and Exchange Commission filings.
Curaleaf’s offer was for $80 million in cash, $20 million to be paid within 30 days and a promise of $10 million at 6% interest.
It was not immediately clear that the largest deal was directly related to the possibility of marijuana becoming a Schedule 3 drug.
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According to the Cannabist report, the deal is for $117.5 million “paid … at closing.” According to Curaleaf, that deal includes “the assumption of a $30 million lease liability.”
The proceeds from the sale will satisfy future debt by the end of 2028, according to The Cannabist Co.
Curaleaf is still to be paid a $3.3 million “breakup fee” from Cannabist because the latter company accepted the lucrative offer, according to a press release.
The power to sell marijuana in Virginia is for adults
Virginia’s medical marijuana market is strictly limited by law to just five vertically integrated permits, each of which is limited to a specific area.
Despite that, the state reported nearly $30 million in sales in July and August, the first two months of state-mandated track-and-trace monitoring.
Adult-use marijuana sales could reach $780 million in the first full year of sales and exceed $1.09 billion in the second year, according to the MjBiz Factbook.
According to a 2020 survey commissioned by state lawmakers, Virginia could support between:
- 100 and 800 farming permits
- 30 and 150 processing or distribution licenses
- 200 and 600 retail licenses
Four other existing medical marijuana licenses are held:
- Miami-based MSO Ayr Wellness, which has yet to open a clinic and recently sold assets, including the Virginia franchise, to creditors.
- Boca Raton, Florida-based Jushi
- Chicago-based Green Thumb Industries
- Chicago-based Verano Holdings Corp.
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In the case of the use of adults – which is considered inevitable, when Virginia Spanberger, who was appointed by the Democratic Government promised to finally introduce the sale of adults in the South – it remains to be seen whether the existing medical operators will get first dibs like in Maryland, or whether the regulators will choose a small business, in the state of New York.
