Cannabist Co. strikes $130M deal for Virginia medical marijuana biz

The Cannabist Co. has scrapped a previously announced $110 million deal to sell its Central Virginia medical marijuana business to a subsidiary of Connecticut-based marijuana products provider Curaleaf, opting instead for a $130 million sale to an entity affiliated with Boston-based hedge fund Millstreet Credit Fund, the company announced Thursday.

The transaction involves The Cannabist Co.‘s Green Leaf Medical of Virginia subsidiary, which cultivates, manufactures and sells medical marijuana in the greater Richmond region. The Virginia assets to be sold include five retail locations, one additional retail location under development, and about 82,000 square feet of cultivation and production capacity. Curaleaf announced plans Dec. 2 to buy these assets.

The new agreement follows a go-shop period during which The Cannabist Co. could seek competing offers. The deal comes the same year the company announced it was forming a special committee to consider asset sales, mergers or other transactions amid financial challenges facing the cannabis industry.

During the go-shop Period, The Cannabist Co. received the $130 million proposal from Millstreet and determined it was the superior deal. The company delivered a written notice to Curaleaf terminating the agreement on Thursday. The Cannabist Co. will pay Curaleaf a $3.3 million breakup fee for terminating the earlier deal.

In a Friday news release, Curaleaf said it determined the $130 million competing bid “exceeded the rational fair value for the assets.”

“Curaleaf will continue to be opportunistic and disciplined in its acquisition strategy,” the company said.

Under the new agreement, the Millstreet affiliate, Parma Holdco, will acquire 100% of Green Leaf Virginia for a total price of $130 million, with $117.5 million paid in cash at closing. The remaining $12.5 million will be placed into escrow at closing and released in two parts: up to $1 million upon the finalization of the post-closing purchase price adjustments, and the remaining amount after nine months, provided the funds are not needed to satisfy indemnification obligations.

The deal is expected to close in early 2026 or sooner, following closing conditions and regulatory approvals. The Cannabist Co. did not immediately return requests for comment.

In related news, President Donald Trump on Thursday signed an order directing the loosening of federal regulations on marijuana, a move that could further reverse decades of tough-on-weed policy.

Trump’s order instructs the attorney general to quickly move ahead with reclassifying marijuana. If that happens, the psychoactive plant would be listed alongside common painkillers, ketamine and testosterone as a less dangerous drug.

Such a decision would represent one of the most significant federal changes to marijuana policy in decades. It could reshape the cannabis industry, unlock billions in research funding and open doors long closed to banks and investors.

Stocks of cannabis-related companies gained on the news from Washington. U.S.-listed shares of Tilray, Aurora Cannabis, SNDL and Canopy Growth gained between 6% and 12% in afternoon trading.

The Associated Press contributed to this report.