License regulations in Florida, Massachusetts could impact high-stakes medical marijuana acquisition

Prune Marijuana Plants ways. Harvesting and Processing Commercial cannabis
The states prohibit companies from owning too many separate licenses. Will Gotham Green Partners get a go-ahead anyway?

A company already drawing scrutiny in Florida for potentially holding a stake in multiple medical cannabis businesses drew similar interest from Massachusetts regulators. Now a high-priced acquisition could hinge on how Florida handles its own licensing rules.

Purchases in both Florida and Massachusetts involve the hedge fund Gotham Green Partners. That business last year made a play to purchase most shares of iAnthus, another fund with a heavy stake in the industry. But that’s a deal iAnthus now wants nixed, with iAnthus and Gotham on different sides of a lawsuit last month in a Canadian court over details of the restructuring deal, according to the trade publication GreenMarketReport. Gotham sued iAnthus demanding more time to finalize the arrangement.

The Gotham deal, though, means a significant purchase in Florida. Because iAnthus owns GrowHealthy, one of 22 medical marijuana businesses licensed to operate in Florida, that would give control of a player in a tightly regulated industry to Gotham, which already owns a stake in MedMen, another licensed cannabis company operating in Florida.

But Florida law forbids the same entity it it owns 5% or of one cannabis license holder from owning any stake in another, as the Tampa Bay Times noted in July. That has the industry’s attention already turning toward the state Department of Health to see what decision gets made about the purchase. Still, in the short history of legal marijuana enterprise in Florida, the state has never denied such a license transfer and many question if it will do so now.

Enter Massachusetts.

Just as this issue plays out in Tallahassee, another state has started its own investigation of Gotham, according to the Boston Business Journal. The Massachusetts Cannabis Control Commission earlier this year already signed off on the Gotham acquisition of iAnthus, which owns three marijuana licenses in the Bay State. But iAnthus, as it sought to nullify a takeover, alleged in court documents in Massachusetts that Gotham had concealed the number of licenses it had stake in within the state, including its interest in MM Enterprises, another company operating in Massachusetts as the parent of MedMen Boston. Massachusetts law prohibits a company having a stake in three or more licenses for cannabis businesses in the state.

That has Massachusetts now investigating the legality of the acquisition.

If deals unravel in two states, it could have international ramifications and impact the court case between iAnthus and Gotham in Ontario Superior Court.

Or it could be remedied in other deals. For example, Canada-based Tilray in August acquired a hefty stake in MedMen from Gotham in a $166-million-dollar deal, according to CNBC. But that’s for a minority stake in the company and the deal remains subject to regulatory approvals in the U.S.

But it raises the significance of a Department of Health decision in Florida on what has become a fairly routine process of transferring licenses with acquisitions.

Jacob Ogles

Jacob Ogles has covered politics in Florida since 2000 for regional outlets including SRQ Magazine in Sarasota, The News-Press in Fort Myers and The Daily Commercial in Leesburg. His work has appeared nationally in The Advocate, Wired and other publications. Events like SRQ’s Where The Votes Are workshops made Ogles one of Southwest Florida’s most respected political analysts, and outlets like WWSB ABC 7 and WSRQ Sarasota have featured his insights. He can be reached at [email protected].


  • JD

    September 15, 2021 at 6:42 am

    The way the state of Florida licensed the medical marijuana trade left little room for small to medium businesses to enter the market.

    That wealth was long divided before it was even made legal with the non-refundable application fee in Florida of $60,036, and more than a slew of other costly and complicated requirements. So much for small business in FL.

    This is why it’s hedge funds doing battle royal for control.

  • Robert Allen

    September 16, 2021 at 1:04 am

    A couple of things. First, iAnthus is not a hedge fund, it is a multistate owner/operator of cannabis cultivation, manufacturing and dispensary operations. Second, Gotham Green is not “purchasing” iAnthus– it is trying to take it over with other predatory lenders in a restructuring transaction that will wipe out almost all of the equity held by shareholders. This is not a license “transfer” like other Florida deal, this is a takeover of iAnthus by Gotham and other lenders who are trying to steal iAnthus from its shareholders under a deal that iAnthus ws forced into last year when Gotham pulled the plug on its funding and caused the company to go into default. Your article makes it sound like two greedy hedge funds fighting each other– this is a bunch of greedy hedge funds led by Gotham trying to wipe out iAnthus’ shareholders and game the Florida rules against owning interests in too many Florida license holders. On behalf of iAnthus’ shareholders and the great employees iof GrowHealthy here in Florida, we sure hope the Dept of Health does the right thing and prevents Gotham from gaming the rules! Thanks for the forum to post this, and thanks for writing about this today!

Comments are closed.


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