In an industry flush with the good green and cold hard cash, a number of foreign “ganjapreneurs” are making American dispensaries offers too good to refuse. Several San Jose pot shops including Harborside recently sealed some dank deals with different investors from Canada, where cannabis stock is legally traded on the market. Harborside completed a $200 million (Canadian dollars) reverse takeover in August with Toronto-based Lineage Grow Company, which will give the marijuana mammoth “access to capital required to facilitate Harborside’s expansion plans in California and the contiguous western states,” adding it to a small but growing list of dispensaries throughout the state with white market investors.
They’re “technically acquiring us but to acquire us, they have to issue so many shares that we end up taking control of the company after the transaction is done,” said CEO Andrew Berman in an interview.
Harborside stores aren’t closing, and products and service will remain the same. “We love the Bay Area and those locations and are very much committed to that,” Berman said.
Another Canadian cannabis firm, Golden Leaf Holdings, secured one of the city’s Sweet 16 dispensaries for $7 million around the same time as the Harborside sale. Its identity remains a secret, but Golden Leaf said in a statement that the mystery storefront will be retrofitted into another branded store called Chalice Farms. Many of San Jose’s pot shops are rumored to have been solicited by their neighbors to the north, according to Sean Kali-Rai, president of the Silicon Valley Cannabis Alliance.
“I think they’ve all been approached, and some by more than one company,” Kali-Rai said. “This really feels like the early, early days of the dot-com boom or something. There’s so much energy in the air, deal-making going on.”
A dearth of cannabis licenses in Silicon Valley has lent to some “pretty amazing” dispensary evaluations, but Kali-Rai is doubtful that cities like Milpitas and Mountain View, both which recently approved pot clubs within their borders, will flatten those prices.
“If you just add up all those cities that may allow it, you’re hard-pressed in Silicon Valley to get to 60, 75 licenses,” he said. “Scarcity is absolutely driving the value and also the address; there’s only one Silicon Valley.”
