Starbuds, one of Colorado's largest dispensary chains, has agreed to sell a handful of stores to a name that's becoming increasingly common in cannabis-industry acquisition news: Medicine Man Technologies.
The deal between the two parties, announced September 3, has Starbuds selling five stores in Louisville, Longmont, Pueblo, Niwot and Commerce City to the cannabis business conglomerate for just over $31 million in cash and Medicine Man Technology stock shares.
But the news doesn't end there. Today, September 4, Medicine Man Technologies announced it has agreed to buy Colorado Harvest Company, a chain of three dispensaries in Denver and Aurora, for $12.5 million in cash and stock.
That's eight dispensaries in two days and ten different companies in three months, all purchased by Medicine Man Technologies.
The company's spending spree started after the Colorado Legislature passed a bill this past session allowing publicly traded businesses, such as Medicine Man Technologies, to hold ownership stakes in marijuana companies. The new law doesn't go into effect until November, though, so the deals announced thus far are still binding agreements and not yet official.
According to Medicine Man Technologies, the founders of its latest acquisitions — Starbuds' Brian Ruden and Colorado Harvest Company's Tim Cullen — will both join the new ownership group in executive positions. It's unknown whether the dispensaries will transition to the Medicine Man dispensary brand, a chain of Colorado stores owned by Medicine Man Technologies CEO Andy Williams.
Last year, Cullen spoke with Westword about the challenges of owning a federally illegal marijuana business and the lack of tax breaks that come with it; he even sold a dispensary license in 2018 to Starbuds (an Aurora location that wasn't included in the Medicine Man deal) to help pay off a tax bill. As consolidation continues in the pot industry, Cullen chose Medicine Man Technologies as his landing spot.
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"Following the passage of this law, the time was never more right for us to join the outstanding team at Medicine Man Technologies, who is now free to invest in the industry, given the synergies involved. Their growing team of Colorado cannabis pioneers is very impressive, and we are happy to be aligned with their joint efforts, all soon to be under one roof," Cullen says in a statement on the deal. "Furthermore, the management team at Medicine Man Technologies is incredibly accomplished, and they are executing successfully on their plan to bring financial discipline and a clear strategy in their efforts to build the region's premier cannabis company. We are delighted to join them in this next leg of growth."
Starbuds still owns six dispensaries in Colorado, with another in Denver on the way, as well as several more stores in Oklahoma, Maryland and Jamaica. But Ruden, who helped push the chain from a few storefronts in Colorado to over a dozen nationwide, will join the Medicine Man Technologies executive team.
"Brian and his team have built an enviable brand and a most successful operation recognized in the industry for its award-winning strains, for its high profitability, and for having the most successful customer loyalty program around," Williams says in a statement. "We happily welcome them and these five locations into the Medicine Man Technologies family."
In addition to these dispensaries, over the last three months Medicine Man Technologies has announced deals to acquire eight more marijuana businesses, including Colorado marijuana brands such as Dabble Extracts, Purplebee's Extracts, Los Sueños Farms and a yet-to-be-named edibles manufacturer, as well as research and medical marijuana companies MedPharm Holdings and Colombian medical marijuana licensee Green Equity.