Steve White, CEO of multi-state operator Harvest Health & Recreation, told investors the company controls seven permits in Pennsylvania, enough to open 21 shops. Pennsylvania limits operators to five permits.
A Philadelphia Inquirer investigation found the company is “using loopholes” to control more of the market than law allows a company to own. These loopholes include “management service agreements” which enable companies to govern and profit from licenses they do not own.
- The story says: “Harvest skirted the state cap on permits by applying through firms with slightly different names.”
- CEO White believes the cannabis market will be as “oligopolistic” — run by a few companies.
- Pennsylvania lawmakers, the piece says, weren’t “prepared for creative arrangements that well-financed marijuana companies are using to control more permits than the law intended.”
- White said he shouldn’t have publicly made the claim about controlling seven permits, but does not plan to return any of them.
- Acreage Holdings and Seahunter Therapeutics are reportedly under investigation in Massachusetts for similar practices. Both companies have denied any wrongdoing.
- Acreage and one of its partners threatened to sue Maine if the state doesn’t relax residency rules for cannabis businesses. A lawyer representing Acreage partner Wellness Connection suggested the residency rule could violate the U.S. Constitution’s Commerce clause.
Maine Public Broadcasting
- The CEOs of Acreage and Canopy Growth discussed their plans to become a global cannabis player once the companies complete their proposed merger.
- Multi-state operator stocks are under pressure. While several large mergers have been announced, the U.S. Justice Department is stepping in with anti-trust concerns.
New Cannabis Ventures