Minnesota-based Goodness Growth Holdings announced Friday that its medical cannabis subsidiary has signed an agreement to acquire Charm City Medicus, a medical cannabis dispensary in Baltimore.
The planned acquisition is the latest effort by Vireo Health — the name of Goodness Growth Holdings’ medical cannabis company — to expand its reach across Maryland, with the business already owning a dispensary in Frederick and cultivation and processing sites in Hurlock and Massey. The company manages dispensaries in five states.
The license transfer to Vireo Health is still pending approval by the Maryland Medical Cannabis Commission. The commission has rejected license transfers before, as it did last month after the commission found a prospective owner had a criminal record.
If the commission approves the acquisition, the dispensary will be renamed Green Goods, the same name as the dispensary in Frederick. The commission has issued pre-approvals to 102 dispensaries in the state, according to its website.
The company expects the transaction to close later this year, according to a news release. It also expects the total consideration at the deal’s closing to be $8 million: $4 million in cash, $2 million in stock from Goodness Growth Holdings and a $2 million promissory note to the seller.
Maryland has a strong medical cannabis market, said Kyle Kingsley, the chairman and CEO of Goodness Growth Holdings. Some of the characteristics of a strong market include patient accessibility, adequate supply and “a broad spectrum of offerings for patients,” Kingsley said.
The success of the dispensary in Frederick has been “unparalleled,” Kingsley said.
“We’re excited to sort of extend on that success,” Kingsley said.
The acquisition comes amid concerns in recent years that out-of-state companies would pose a threat to locally-owned medical dispensaries in Maryland.
In 2019, state legislators wanted to stop multistate companies from taking control of Maryland’s medical cannabis industry. The Maryland General Assembly ended up passing legislation that forbids companies from owning more than four dispensaries in the state. The legislation prompted concerns from some in Maryland’s medical cannabis industry that it was not strict enough and would harm homegrown dispensaries across the state.
To Kingsley, something extra that his organization brings to the table is an expungement clinic for the local community. The company partners with local law firms to get some people’s nonviolent drug offenses expunged from their records.
“I haven’t seen a lot of that going around from local businesses and others, and so we’re excited to bring that to the table for the local area around the dispensary,” Kingsley said.
The coronavirus pandemic has not significantly altered Goodness Growth Holdings’ operations, Kingsley said, and none of the dispensaries had to be shut down.
“We’ve had no work stoppages or supply chain interruptions,” Kingsley said. “We’ve really had great business continuity throughout the pandemic.”