Boston-based medical cannabis company Ascend buys Springfield dispensary
SPRINGFIELD — Amid Gov. J.B. Pritzker's push to legalize marijuana for recreational use in Illinois, one of Springfield's two medical cannabis dispensaries has been purchased by a Boston-based cannabis company.
HCI Alternatives, which has locations in Springfield and Collinsville, is being bought by Ascend Wellness, a vertically-integrated cannabis company that currently operates in Massachusetts, Michigan and Ohio. The purchase price was not disclosed.
The Boston-based company has also entered into a long-term lease agreement to operate a 75,000-square foot cultivation facility in Barry, which is about 80 miles west of Springfield.
HCI and the Barry cultivation facility will operate under the banner of Ascend Illinois. Chris Stone, the founder and CEO of HCI, will assume the same role in the new company. He said the deal is still pending approval from state regulators, but expects a decision soon.
Stone said the transaction would be mutually beneficial, with Ascend gaining access to a new statewide medical cannabis market -- of which HCI reportedly has a 10 percent market share -- and HCI benefiting from expertise of its new parent company.
"It was a transaction with good synergies," Stone said. "Obviously, we're in the cannabis space in Illinois, Ascend Wellness is in the cannabis space in Michigan, Ohio and Massachusetts. And so bringing in a partner to do things that we didn't have the expertise to do as well as to become vertically integrated in the cannabis market in Illinois, I think were probably the primary factors in doing this merger."
Ascend Wellness did not respond to a request for comment, but company founder Abner Kurtin said in a December press release that "Ascend is excited to bring a wide variety of branded product to enhance the experience of the Illinois consumer."
This improved experience will include some changes on the retail side of the operation as well as the creation of new strains and brands.
For the time being, the HCI name and brand will remain, Stone said.
"The good thing in our market is that (our name has) got great recognition," Stone said. "We've built a nice brand for our geographic territories in Springfield and Collinsville, so I think that that's got some benefits."
HCI was founded in 2016, three years after state lawmakers voted to authorize a pilot program for medical marijuana. Since the program was launched in 2015, more than 61,000 patients have been approved to purchase cannabis from one of the state's 55 licensed dispensaries. In 2018, retail sales totaled more than $136 million.
Last month alone, more than 40,000 unique patients purchased nearly $17.7 million in medical cannabis products. 2019 retail sales through March already total more than $44 million.
With the medical pot market budding, Stone said that Ascend Illinois is working on expansion plans across the state, with "possibilities in Chicago and the suburbs" in addition to more downstate locations.
And, should marijuana be legalized for recreational use, Stone said the acquisition "better prepares us for the possibility of an adult use program" in the future.
Ascend has raised more than $100 million in capital and, according to Kurtin, the company expects "to be operating in all four of our markets by the end of 2019."
-BRENDEN MOORE The State Journal-Register