New Jersey is likely to be the next state to legalize adult-use marijuana and because of it, the state has become the center of attention of many entrepreneurs, businesses, and seasoned experts in the industry. The potential legalization of marijuana has certainly boosted the appeal the NJ cannabis marketplace had before and as a result, many big businesses and large firms are entering the NJ marijuana market.
In the past few months, many international marijuana companies that have big names in the cannabis industry have taken steps to establish themselves in New Jersey. One of these companies is Canopy Growth which recently secured its position to purchase Acreage Holdings thanks to the triggering event of federal permissibly of marijuana.
Acreage Holdings is itself a big name in the marijuana industry as it is one of the largest cannabis retail, cultivation, and real estate companies in the country. Acreage Holdings entered the New Jersey cannabis edibles market a while ago, breaking into the Garden State in a big way – hiring influential players and making deals. The company operates in 12 states and it arrived to New Jersey when the expansion of NJ’s medical cannabis program was ordered by Gov. Murphy.
After arriving in New Jersey, Acreage quickly managed to form partnership with Compassionate Care Foundation of Egg Harbor Township, making their position very strong in the NJ cannabis edibles marketplace. Acreage Holdings and NJ marijuana dispensary signed a letter of intent to enter a long-term management contract to help with future operations and expansion.
Following the triggering event, Ontario-based firm Canopy Growth has spent about $300 million initially in order to buy Acreage Holdings for about $3.4 billion. The large firm also received a $4 billion investment last year from the Fortune 500 alcohol company Constellation Brands which produces Modelo and Corona beers, Woodbridge wines, and Svedka vodka, among others. With huge investment to buy Acreage Holdings, the future of Canopy Growth and its key role in the New Jersey cannabis edibles marketplace is already looking bright and the company will surely benefit a lot from the legalization of marijuana in the state.
Harvest Health and Recreation is another big company entering the NJ marijuana market. For an undisclosed fee, Arizona-based large firm has recently entered into a definitive, binding agreement to acquire CannaPharmacy, Inc. The terms of this deal haven’t yet been disclosed.
CannaPharmacy operates and owns marijuana licenses in various states, including Maryland, Delaware, Pennsylvania, and New Jersey and holds a minority interest in pending licensee in Colombia. CannaPharmacy operates the licenses through management companies. It operates in New Jersey through NJ marijuana dispensary known as Garden State Dispensary. According to Harvest Health and Recreation, the deal with CannaPharmacy will prove to be invaluable for the incremental growth of the company in the near future as it will help strengthen its position in the marijuana marketplace.
Harvest Health and Recreation has three core objectives; build national brands, expand and deepen wholesale and retail footprint, and continue their path to profitable growth. According to the executive chairman of Harvest, the deal of the large firm with CannaPharmacy will back up these core objectives.
The impact of Harvest Health and Recreation entering the NJ cannabis market is going to be huge, especially for niches like NJ marijuana dispensary. The company has led the marijuana market in the Western United States for years and the deal with CannaPharmacy will extend and widen the company’s foothold to the East Coast. When you add this to their existing dominant position in the Maryland and Pennsylvania markets, their pending acquisitions of Verano and Falcon, as well as their acquisition of CBx and its variety of brands, you can be sure that Harvest Health and Recreation will become a household name throughout the region within just a few months.
Both of these big firms have not just one but two routes into New Jersey. Apart from securing its position to buy Acreage Holdings, Canopy Growth has also made a deal with majority owner of NETA-NJ TerrAscend. Harvest Health and Recreation on the other hand, has signed a definitive, binding agreement to acquire Verano Holdings, the parent company of Verano NJ, LLC.
Given the great amount of capitalization behind these large firms, criticism regarding the landscape of the marijuana industry in New Jersey continues as to whether there will be opportunities for startups or they will be exclusively available to deeply-pocketed companies. Still the deals of both big companies face regulatory inspection with respect to license changes in New Jersey and it seems unlikely at the moment that either of these companies will be able to secure more than one license.