Big player in pot economy seeks to buy 1 of R.I.’s 3 dispensaries

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One of the nation’s largest marijuana investment firms is looking to make money in Rhode Island’s medical marijuana program.

Acreage Holdings — which has marijuana interests in nearly a dozen states and counts among its directors former U.S. House Speaker John Boehner and ex-Massachusetts Gov. Bill Weld — is in talks to buy Greenleaf Compassion Center, in Portsmouth, one of only three medical marijuana dispensaries in Rhode Island.

Greenleaf CEO Seth Bock said Wednesday he had signed a letter of intent to sell the business but could not disclose the potential buyer because of a nondisclosure agreement.

However, Norman Birenbaum, the state’s chief marijuana regulator, said the Department of Business Regulation was not bound by any nondisclosure agreement and identified the prospective buyer as Acreage, “one of the larger national cannabis outfits.”

Acreage, headquartered in New York, owns marijuana cultivation, processing and dispensary operations in 11 states, according to its website.

Last month Bloomberg News reported that the Ontario-based Canopy Growth Corp., the world’s largest cannabis company, was in talks to buy Acreage for $3.4 billion.

Greenleaf, which opened in June 2013, has been on the front lines of increased competition ever since recreational pot stores opened months ago across the state line in Massachusetts.

And like Rhode Island’s other two dispensaries — the Thomas C. Slater Compassion Center, in Providence and the Summit Medical Compassion Center, in Warwick — Greenleaf has lobbied hard in recent years against legislative attempts to increase the number of dispensaries in the state.

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Last year, when Gov. Gina Raimondo pitched 12 new dispensaries, Bock said any expansion of that magnitude threatened the existence of his business. The proposal failed.

Raimondo is proposing this session to open six more medical marijuana dispensaries to serve the growing number of licensed marijuana patients, now numbering about 18,300. The dispensaries have also sold marijuana to almost 6,000 out-of-state registered patients in the last year since lawmakers approved the practice.

Raimondo has also pitched legalizing recreational marijuana this session. Under the legislation, the state’s three dispensaries would get first shot at selling retail pot since they already operate under strict growing and sale regulations, officials have said.

In 2006, when Rhode Island lawmakers answered the appeal of one of their own, Thomas Slater, who had been diagnosed with cancer, and approved the use of marijuana as medicine, the move was seen as largely for altruistic reasons.

But the landscape has changed in a decade, and investors have found ways to profit even from dispensaries, like Rhode Island’s, that are, on paper at least, nonprofit entities.

Medical marijuana dispensaries today contract with management companies to essentially run their businesses, even renting out their equipment and office space. Those management firms can direct profits back into the pockets of dispensary owners and investors without running afoul of nonprofit provisions.

But because of how Rhode Island’s medical marijuana laws were written, the state still has oversight over much of a dispensary’s operation, including having final say over its sale, said Birenbaum.

“They need to make sure everything they propose complies with state regulations,” said Birenbaum.

Those regulations include that dispensary board members or office holders be Rhode Island residents, and that all investors are identified: “Anyone who has any type of financial interest must be disclosed to us.”

An investor can be from another state, but they can’t have interest in more than one Rhode Island dispensary, said Birenbaum, “so we have to make sure there is no conflict of interest.”

Regulators also check to see if investors or owners with interests in other states are in good standing in those states.

Next door, in Massachusetts, the state’s Cannabis Commission is investigating whether big marijuana companies, through complicated ownership structures, have control over more than the three allowed retail stores.

Acreage was one of two companies identified by the Boston Business Journal as having ties to entities with more than the state’s allowed three licenses.

A spokesman for Acreage could not be immediately reached for comment.

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