Schwazze, a Denver-based marijuana conglomerate formerly known as Medicine Man Technologies, has announced plans to acquire around a dozen different dispensary chains and established marijuana companies over the last fourteen months — but how many of those deals are going through?
So far, just one: In April, Schwazze finalized the purchase of a group of four dispensaries and a marijuana extraction company in southern Colorado. But since May, five of the company's business agreements have been terminated, in some cases by Schwazze and in others by the acquisition targets.
Medically Correct, a marijuana concentrate and infused-product manufacturer, was the latest to cancel a merger with Schwazze, and this week announced plans to shift toward pushing its own new product labels instead.
"We have great respect for Schwazze and its overall goals, and we look forward to the new opportunities on the horizon for Medically Correct and our brands," Medically Correct president Bob Eschino says in a statement.
Rich Kwesell, co-owner of southern Colorado dispensary chain Strawberry Fields, said something similar in May after walking away from a $31 million acquisition by Schwazze. Denver dispensary chain Colorado Harvest Company also canceled a $12.5 million merger with Schwazze this summer.
Schwazze has also moved to terminate two deals, axing plans to buy marijuana extractor Dabble Extracts and Los Sueños Farms, one of the country's largest outdoor pot farms. And the deal with Green Equity, a Colombia marijuana cultivator that Schwazze had announced it was buying for $5.4 million in June 2019, was also eventually terminated.
Still, Schwazze keeps announcing deals. In June, it revealed plans to take over fourteen Starbuds dispensaries in Colorado, up from an originally agreed-upon five stores, for $118 million.
The company declined to comment on the latest agreement dissolutions, but Schwazze has stated that "key business and valuation issues," as well as a lack of diligence, caused the company to walk away from the deals with Dabble Extracts and Los Sueños. (Los Sueños COO Bob DeGabrielle resigned in June, according to SEC filings.)
In May, Schwazze CEO Justin Dye said that all planned acquisitions remained on track, a claim he repeated earlier this month, while also noting that the company is still identifying potential acquisition targets.