Mount Pleasant-based cannabis company Stash Ventures has acquired the dispensaries of Troy-based Cloud Cannabis Co. in what is the first notable acquisition in the sector of 2024.
Financial terms of the deal, which closed late last month, were not disclosed.
Under the deal, Stash Ventures takes control of Cloud’s 11 dispensaries in Michigan — Ann Arbor, Detroit, Muskegon, Traverse City, two in Grand Rapids, Utica, Gaylord, New Baltimore, Cedar Springs and Kalamazoo.
The dispensaries will continue to operate under the Cloud Cannabis name to preserve Cloud’s “already well-established market position,” Stash Ventures said in a press release.
Stash Ventures already operates three dispensaries in Michigan under the Timber Cannabis Co. name in Mount Pleasant, Owosso and Sturgis.
The acquisition of Cloud also gives Stash Ventures the ability to more widely distribute its High Minded and High Minded Creations marijuana products in Southeast Michigan. The company also operates a grow and processing operation in Sturgis.
“Growing our investment in the State of Michigan is important to us, and we’re proud to be able to do this with such a well-established brand like Cloud Cannabis,” Scott Moorehead, CEO of Stash Ventures, said in a press release. “The merger also presents an exciting opportunity for our High Minded and High Minded Creations products as there will be expanded retail outlets for customers to find our exceptional flower and products.”
Cloud Cannabis retains its marijuana grow and processing operations under the deal, allowing the company to focus squarely on wholesale distribution of marijuana instead of retailing to consumers.
“This transaction with Stash Ventures represents a pivotal strategic decision for our team,” John McLeod, co-founder of Cloud, said in a press release. “We recognized an extraordinary opportunity to orchestrate a mutually beneficial financial and operational outcome for both parties, while enabling us to sharpen our focus on our established wholesale operations. This move is a testament to our commitment to our stakeholders and aligns with our vision for the future.”
The move to pare down operations stands in contrast to how the industry has been moving, toward more vertical integration. Operating both a grow operation and dispensary allows companies to realize margins on both side of the business.
It’s unclear whether Cloud ran into troubles operating the dispensaries. McLeod did not immediately return calls and messages about the deal.
The industry is finally stabilizing after a nearly two-year price freefall that claimed many in the industry, including one of the largest operators Skymint.
The average price for an ounce of flower in the recreational marijuana market was $95.08 in December, up from a low last year of about $81. Prices, however, had been higher than $525 per ounce in early 2020.
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