Curaleaf agrees to buy Central Virginia medical marijuana operation for $110M

The Cannabist Co., a Massachusetts-based multistate cultivator, manufacturer and retailer of marijuana products, has entered into an agreement to sell all ownership interests of its subsidiary that provides medical marijuana in Central Virginia for $110 million to a subsidiary of Connecticut-based marijuana products provider Curaleaf Holdings, the companies announced Tuesday.

Curaleaf Inc. will buy Green Leaf Medical of Virginia (branded as gLeaf Virginia), The Cannabist Co. subsidiary that cultivates, manufactures, distributes and sells medical marijuana in the greater Richmond region. The Virginia assets that are part of the purchase agreement under consideration include five retail locations, one additional retail location under development and about 82,000 square feet of cultivation and production capacity.

Followers of the marijuana industry would likely say it’s a good time to get into the medical marijuana business in the commonwealth. After Gov.-elect Abigail Spanberger is sworn in this January, many expect Virginia to quickly launch a retail marijuana market, long delayed under the administration of her Republican predecessor, Gov. Glenn Youngkin.

“The fact that Virginia is poised to expand from medical to adult-use retail sales certainly makes such a purchase all the more enticing,” said JM Pedini, the development director of the National Organization for the Reform of Marijuana Laws (NORML), who also serves as executive director of the Virginia affiliate chapter.

Virginia’s medical marijuana program is divided into five health service areas (HSA). As designed, each area should have a single licensed pharmaceutical processor, which is the only authorized grower and dispenser of medical marijuana in that region. The subsidiary of The Cannabist Co. being sold serves the medical marijuana market in Virginia’s Health Service Area IV, which includes Richmond and other Central Virginia localities, as well as a few counties in Southern Virginia.

In 2024, the Virginia Cannabis Control Authority (CCA) took over regulatory oversight of Virginia’s medical marijuana program from the state Board of Pharmacy.

Jessica Fullerton, a spokesperson for the CCA, said the agency does not have the authority to review or approve ownership changes to pharmaceutical processor licenses before those changes take effect.

If closing conditions are met, Curaleaf plans to close the deal in the first quarter of 2026, according to a company news release. The transaction has a go-shop period in which the target company can seek competing offers. That ends Dec. 22.

If another bid is accepted or if The Cannabist Co. fails to receive noteholder consent for the purchase, Curaleaf will be entitled to a $3.3 million breakup fee as well as associated expenses up to $350,000.

The Cannabist Co., known as Columbia Care until 2023, took control of Virginia’s HSA IV license after its 2021 acquisition of Green Leaf Medical.

A spokesperson for Curaleaf did not respond to questions sent by Virginia Business, but did provide a link to a press release on the purchase agreement. The Cannabist Co. did not respond to a request for comment.

Earlier this year, The Cannabist Co. announced the formation of a special committee to consider asset sales, mergers or other transactions “in consideration of the ongoing operational and financial challenges for the company and the industry, as well as of the continuing uncertainty as to if and when U.S. federal regulatory changes may occur that will impact the company and the industry.”

Most companies in the marijuana industry are facing financial struggles, according to Pedini.

“It’s the cost of doing business in a highly regulated and federally illegal industry,” they said.

In August, The Cannabist Co. closed on the sale of a Pennsylvania affiliate, resulting in the sale of three dispensaries for $10 million. In November, the company completed the sale of its leasehold interest and equipment in a Florida cultivation facility for $11 million, with the potential of an additional $1 million if Florida legalizes adult use.

In 2024, Verano Holdings, a Chicago-based multistate cannabis company, closed on the acquisition of The Cannabist Co.’s subsidiary that was the sole vertical medical marijuana provider for HSA V, which encompasses the Hampton Roads region. The Cannabist Co. called that deal “a critical move for us as we continue our path of building a better business and reshaping our footprint to improve our financial footing, ultimately bringing us closer to profitability.”

Eric Postow, Fairfax-based managing partner for Holon Law Partners, said the purchase agreement signals greater dominance by multistate marijuana operators “in a Virginia market that was originally intended to be more Virginia-business-centric.”

“Curaleaf is a major national operator with a long regulatory history, and their entrance will reshape the competitive landscape here,” Postow wrote in an email.

As for Pedini, they didn’t hesitate when asked whether Virginia consumers will benefit if Curaleaf is able to acquire The Cannabist Co.’s subsidiary that serves HSA IV’s medical marijuana market.

“What’s good for Virginia consumers is having operators who can deliver medical cannabis that’s safe, convenient and affordable,” they said.

HSA I, the area that encompasses the Shenandoah Valley, Charlottesville and Fredericksburg, does not have a medical marijuana provider. In 2024, the CCA awarded a subsidiary of AYR Wellness a conditional approval to serve as that region’s pharmaceutical processor. Curaleaf was among 40 applicants, who each paid $18,000 in fees, to be considered for the HSA I license.

AYR Wellness, which is based in Miami, entered a restructuring agreement over the summer due to overwhelming debt.