Ascend Wellness Holdings’ committed approximately $30 million to acquire Chicago’s MoCa Modern Cannabis and its two Chicago dispensaries, says Ascend CEO Aber Kurtin.
New York-based Ascend earlier this month announced it raised $41 million in new capital to fund acquisitions. Kurtin says the company is pursuing additional Chicago retail locations via acquisition and partnership with social equity licensure holders, which are expected to be announced in September by the State of Illinois.
Kurtin, a hedge fund and real estate investor, said “MOCA was a bit of a unicorn” in Illinois as it is operating two dispensaries in prime Chicago locations. Kurtin, as well as several cannabis industry investors and executives surveyed by Grown In, said MoCa’s valuation was tied to buildout investments already made and sales potential.
“We’d love to acquire more if we can do it in a price-effective way,” he said.
In Illinois, Ascend already operates a cultivation facility in Barry, as well as two dispensaries in Springfield and one in Collinsville, near St. Louis. Assuming Illinois regulators approve the acquisition of MoCa’s Logan Square dispensary and newly opened River North location, the company would own five active state dispensary licenses and one unused. Cannabis companies are limited to 10 retail locations in Illinois.
After a year of declining valuations and limited access to investment capital, commercial cannabis companies that own licenses to grow and sell the plant in Illinois are now increasingly attractive to public and private investors. Independently owned dispensaries in Chicago and throughout the state are being courted for acquisition.
Cannabis investors and operators note that MoCa, with prime locations and extensive build outs in Chicago’s River North and Logan Square neighborhoods, is likely valued at a higher price tag than the average Illinois dispensary. However, the valuation floor for individual operational dispensaries in the city appears to be $6 million to $10 million, based on Grown In’s informal survey of multiple operators, investors, and service providers tracking the market.
Incumbent Illinois medical marijuana dispensary owners like MoCa were provided a second recreational-only license in the 2019 law legalizing recreational sales. Accordingly, the valuation of licensed Illinois dispensaries operating or preparing to operate in Illinois is based on coupled assets of at least two dispensaries. Citing regulatory complexity, investors and cannabis executives tell Grown In off the record that individual dispensaries from incumbent license-holders are not in play, but rather sold as two-packs.