State medical cannabis regulators Thursday approved the transfer of five licenses to Florida’s first and largest licensed cannabis company.
The transfer of three dispensaries, one processor and one grow license to Florida-based Trulieve Cannabis is part of a $2.1 billion deal with Harvest Health and Recreation.
Commissioners unanimously approved the transfer of 95% ownership in Harvest’s growing facility in Hancock as well as a dispensary in Rockville. The change in ownership will not affect the 5% ownership stake held by the town government of Hancock, according to regulators.
Also approved was a restructuring of ownership in Harvest’s processing facility in Hancock. The facility drew additional scrutiny from regulators because it had been licensed for less than three years.
State law generally requires a licensee to be in operation for three years before ownership can be transferred.
Two weeks ago, attorneys for the town of Hancock said Harvest was seeking support from the town. Failure of the Maryland Cannabis Commission to approve the restructuring could have resulted in an end to production at the facility, town council members were warned.
The license for the processing facility in Hancock was previously held by Harvest of Maryland Production LLC. The majority equity holder and controlling owner of that license is Steven White.
White is the chief executive officer of Arizona-based Harvest Health and Recreation. Under the terms of the approved restructuring, White will remain the majority equity holder but see his share increase under the restructuring deal, according to Will Tilburg, executive director of the Maryland Medical Cannabis Commission.
The license currently held by Harvest will ultimately be transferred to HMDP Holdings Inc., according to regulators.
Regulators also unanimously approved the transfer of 100% ownership of two Baltimore County dispensaries to Trulieve Cannabis.
The approval includes a complicated exchange in which the ownership is first transferred to an LLC before being moved to Trulieve’s control.
“This is a pretty complex transaction that involves a lot of entities,” said Brian Lopez, chairman of the state medical cannabis commission.
Lopez said Trulieve will ultimately control four dispensary licenses in the state — the maximum under state law.
The sale of the five licenses is further evidence of consolidation in the cannabis industry in Maryland and nationally that includes medical use in Maryland but also recreational sales in other states.
The Maryland General Assembly is expected to take up legalizing adult recreational use in the 2022 legislative session.
Trulieve is the first and largest licensed cannabis company in Florida. Its acquisition of the five licenses in Maryland is part of a larger merger with Harvest. The $2.1 billion deal announced in May would make Trulieve the largest U.S. cannabis company by sales.
Officials at Trulieve did not immediately respond to a request for comment.
The company owns dispensaries in California, Connecticut, Florida, Massachusetts, Pennsylvania, and West Virginia.
When the merger with harvest is completed, the company will expand to 126 dispensaries in 11 states as well as 22 cultivation and processing facilities, according to a statement issued in May by the company.