If you were looking for a sign of the relative strengths of the cannabis industry as a whole, and Michigan’s marijuana biz, look no further than this MJBiz Daily report on the acquisition of Michigan cannabis company Gage Growth for $545 million by TerrAscend:
TerrAscend, which has operations in both the U.S. and Canada, said the deal will give it a leading position in Michigan, which the company considers the third-largest American cannabis market.
New York- and Toronto-based TerrAscend calculated its “third-largest-market” claim by annualizing Michigan’s record $171 million in marijuana sales for July.
“Combining our market-leading share in our existing states with Gage’s proven cultivation, retail, and marketing capabilities, creates one of the largest and most dynamic companies in the industry,” TerrAscend Executive Chair Jason Wild said in a news release issued Wednesday.
According to the release, the combined business will:
- Operate in five states – California, Maryland, Michigan, New Jersey and Pennsylvania – and Canada.
- Own seven cultivation and processing facilities, including three Gage facilities in Michigan.
- Own 23 operating dispensaries in medical and adult-use markets, including Gage’s 10 operating dispensaries in Michigan.
- Gage plans to open 10 more Michigan dispensaries “in the coming months,” according to the release.
…Although Michigan’s wholesale marijuana prices “are much lower than other nearby limited license states,” Bennett wrote, “to date, the bigger (multistate operators) have avoided Michigan as (it is) harder to make money, and therefore (there is) less ‘big player’ competition.”
TerrAscend cited Gage’s Michigan licensing agreement with Cookies as a benefit of the acquisition as well as Gage’s licensing deals with other cannabis brands, including Slang Worldwide and Khalifa Kush.