Another one of Colorado's early recreational marijuana businesses has been acquired by a national company: Medicine Man, a network of four dispensaries and a 32,000-square-foot growing operation in the Denver area, has agreed to be purchased by Columbia Care in a deal estimated to be worth $42 million.
Columbia Care, which recently bought the Green Solution's chain of 21 retail pot shops and production facilities in a $140 million deal, currently owns nearly seventy active dispensaries across thirteen states. If the Medicine Man acquisition goes through in the fourth quarter of this year as planned, Columbia Care will own 25 marijuana stores in Colorado alone, as well as a number of marijuana production facilities and infused-product brands.
Founded in 2009 by the brother-sister trio of Andy Williams, Pete Williams and Sally Vander Veer, Medicine Man had originally accepted a purchase offer from Schwazze (formerly Medicine Man Technologies), a cannabis conglomerate co-founded by Andy Williams, but terminated that agreement last August, around the same time that several other Schwazze acquisition deals fell apart.
In a statement announcing the Columbia Care agreement, Andy Williams says he supported the merger: "Our industry is changing and growing now faster than ever. We recognize the need to partner with others in order to continue to compete within, and help to responsibly transform, the industry as it grows."
The deal includes $8.4 million in cash and $33.6 million in stock, according to Columbia Care. Vander Veer, who serves as Medicine Man CEO, says she will continue in that role for at least another year, and the Medicine Man staff will be retained after the purchase. Columbia Care will retain Medicine Man's branding at the local chain's dispensaries in Aurora, Denver, Longmont and Thornton
Vander Veer calls the Schwazze deal termination a "blessing in disguise," but declines to give specifics on how that deal fell apart. As for the Columbia Care offer, she says it was fair and satisfactory to all the owners, who moved to Colorado when the three were still in grade school.
"We grew up a bunch of poor kids," she explains. "This is just years of a lot of hard work that we're going to celebrate as a family and as a company."
Columbia Care chief growth officer Jesse Channon doesn't rule out possible expansion of brands like Medicine Man or the Green Solution in the future. "Right now, what we've tried to do is organize ourselves with a national brand architecture that makes sense, brands that we could take across the country," Channon says. "I think something like Medicine Man falls in the same boat, whether it's a retail experience or from a branding point of view."
Headquartered in New York, Columbia Care is a publicly traded company selling over-the-counter stock; it's stayed busy acquiring and opening dispensaries since announcing the $140 million deal with the Green Solution in 2019. Like the Medicine Man deal, the majority of the Green Solution purchase — $110 million — was based on Columbia Care stock shares.
Columbia Care has opened dispensaries in Arizona, California, Illinois and Utah over the last month, but Channon still sees value in established markets like Colorado, where nearly $2.2 billion in marijuana products were sold in 2020.
"Colorado's a mature market. We definitely see it as one continuing to grow," he explains. "I think there's also an incredible opportunity for growth in technology and customer innovation with the combination of the Green Solution and Medicine Man."
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