April 4, 2017
Subscribe to our newsletter to get alerts about new posts, local news, and industry insights.
Pennsylvania and Maryland aren’t the only states where marijuana licenses are attracting big investors. Now, Florida marijuana license holders are getting noticed as investors shop for ownership stakes in seven very valuable licenses.
As Cannabiz Media revealed in the Marijuana Licensing Reference Guide: 2017 Edition, the value of a cultivator, processor, or dispensary marijuana license varies from one state to the next. The reason is simple. The opportunity for the marijuana market to grow is much bigger in some states than it is in others. While Florida’s newest medical marijuana program hasn’t been defined yet, it will grow in the near future thanks to voters who voted to expand it in November 2016.
Based on the data in the Marijuana Licensing Reference Guide: 2017 Edition, Florida doesn’t necessarily tick all of the boxes to be considered one of the big growth states – at least not in the immediate future. Even with the expansion of the program, key medical conditions still won’t be covered by the program (e.g., chronic pain), and the high cost of entry into the market for marijuana businesses could negatively affect consumer accessibility in the future, not to mention raise product prices due to the trickle-down effect.
However, the population in Florida is surging, particularly among older Americans. In other words, the medical marijuana patient population in Florida will continue to grow, and as a result, demand should continue to grow as well. It’s not surprising that investors would want to get in on the marijuana market at this early stage. In fact, we’ve already see this type of investing behavior happening when California’s marijuana industry-focused advisory firm MedMen acquired Bloomfield Industries Inc., one of just five companies with a fully stacked license to grow and distribute medical marijuana in New York.
Based on the $100 million valuations that some marijuana cultivators in Florida are getting, it appears that the value of a marijuana license in the state is very high. Why? There are only seven cultivator licenses available, and those licenses are fully stacked. That means the license holder controls the marijuana from seed to sale. In other words, there aren’t a lot of opportunities for investors to secure ownership in this nascent but growing industry.
License holder information at the investor level isn’t shared publicly in Florida, but the Miami Herald reports that GrowHealthy Holdings brought in an additional eight investors two years ago for a total of $4.7 million. Surterra Therapeutics’ associated private equity company, Surterra Holdings, has reported that it has raised $30 million in equity.
Interestingly, the Miami Herald also reports that a single, unnamed investor purchased $6.375 million in shares of Surterra Therapeutics on the same day in November that Floridians voted to expand the state’s medical marijuana program. Surterra Holdings made the first of three $10.3 million equity sales on the same day.
Most marijuana license holders that are securing these big equity investments in Florida plan to use the money to fund new dispensaries and facilities. Although most cultivators are not profitable currently, there are big expectations and big hopes for huge payoffs in the future. Certainly, those big investors are counting on it.
You can learn more about the value of marijuana licenses in the Marijuana Licensing Reference Guide: 2017 Edition. Licenses are evaluated based on five key factors analyzed in relation to 10 critical areas that can affect a license’s value.
.png)