"It grows...and it eats you alive."
That's how the narrator of the trailer for the 1958 horror movie The Blob described an alien life form that engulfs everything it touches, but he might as well have been talking about Medicine Man Technologies. The Denver-based business conglomerate announced another acquisition this week, the sixth marijuana company that Medicine Man Technologies has agreed to purchase over the past three months.
On August 12, Medicine Man Technologies announced plans to acquire Dabble Extracts, a Colorado Springs marijuana extraction company. According to the terms, the publicly held Medicine Man Technologies will pay $3.75 million for Dabble: $750,000 in cash and $3 million worth of Medicine Man Technologies stock holdings.
"The proposed acquisition of Dabble Extracts will further enhance our product portfolio, as it will bring the expertise and unique extraction capabilities necessary to create high-quality cannabis concentrates in the form of shatter and wax products," Medicine Man Technologies CEO Andy Williams says in a statement confirming the sale.
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However, the purchase can't officially go through until November 1 at the earliest, because that's when the language of House Bill 1090 goes into effect. Because Medicine Man Technologies is a publicly held company, it's banned from entering Colorado's marijuana industry under current investment regulations, most of which will be replaced by the new law stemming from HB 1090.
The Dabble brand will remain intact, according to founder Josh Hindi, who will stay on to run the company as a branch of Medicine Man Technologies after the purchase goes through. As larger companies like Medicine Man Technologies start swallowing smaller brands like Dabble, Hindi expects changes to the state's pot industry above and below the surface.
"It could be positive and could be negative. It could be positive if you've got quality operators in charge of multiple operations," he says. "Some of the smaller guys who were still getting away with cutting corners will get weeded out. But at the same time, it used to be an industry primarily driven by hippies who were trying to help people. Now it's slowly being taken over by MBAs who are about the bottom dollar."
With deeper pockets set to enter Colorado's marijuana industry sooner than later, Hindi says he wanted to pick a partner he liked before being forced to pick one based on financial need. "Realistically, it was kind of teaming up. But we wanted to pick our team instead of being forced into one," he explains, adding that Medicine Man "fought and bled for this industry for the last decade in Colorado. All of the other opportunities were with people I didn't know or investors from out of state."
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Dabble extracts will remain available in the fifty to sixty dispensaries where they are currently sold, Hindi says, though he expects Dabble's distribution to grow after the merger. "Dabble's not going anywhere," he adds. "I'm not cutting and running. I'm here to stay — and dabble."
Once the agreement is finalized, Dabble will join a large team of known pot brands. On June 5, Medicine Man Technologies announced it had binding agreements to buy Los Sueños Farms, an outdoor marijuana farm on 36 acres outside of Pueblo, as well as Mesa Organics Ltd, which owns a commercial cultivation, dispensary and extraction facility in Pueblo. Later that month, the company announced an agreement to buy Colombian medical marijuana licensee Green Equity. Before the summer shopping spree, Medicine Man Technologies also agreed to buy cannabis pharmaceutical research firm MedPharm Holdings; it is also set to purchase Medicine Man dispensaries, which Williams owns, upon HB 1090's implementation.
Medicine Man Technologies currently reports also having ownership in a cannabis nutrient brand (Success Nutrients), a hydroponic store and wholesale supplier (The Big Tomato), a marijuana consulting business (Denver Consulting Group), and a publishing outlet for books and phone apps (Three a Light).
Medicine Man keeps going...and growing....