CeresMED, which owns medical cannabis vendors Champlain Valley Dispensary and Southern Vermont Wellness, will merge with the Toronto-based company Slang Worldwide in a $25 million deal. The transaction will provide CeresMED with an infusion of capital as it prepares to enter the recreational market next year.
“It's been a long road to get here, and we’re super excited to have found someone who aligns with our values and how we see ourselves in the bigger industry, and who can capitalize us,” said Bridget Conry, director of brand experience for CeresMED. “It's been really hard to finance our growth.”
Slang, a publicly traded company that buys and sells licenses for cannabis edibles and accessories, has distributed some of its own brands through CeresMED’s dispensaries since 2015; because federal law prohibits the interstate sale of cannabis, explained Conry, CeresMED purchases the formulas and manufacturing equipment from Slang, then assembles the products in its own facilities.
The merger will underwrite a 50,000-square-foot expansion of CeresMED’s Milton headquarters and eventually allow the company to hire up to 50 more employees, said Conry, effectively doubling its size. The acquisition will also open new markets for CeresMED’s Vermont-manufactured CBD products in 12 other states, including Oregon and Colorado, where Slang owns distribution channels.
“This is an opportunity for Vermont brands, especially women and BIPOC-owned brands, to get that exposure and possibly be able to link up to those supply chains, as well,” said Conry.
With the sale of CeresMED, all three of Vermont’s medical cannabis license holders will be owned by out-of-state conglomerates. Under S.54, the bill passed by the Vermont legislature last year that legalized the sale of recreational marijuana, medical cannabis license holders can begin selling for recreational use in May 2022, five months earlier than the October 2022 start date for other Vermont retailers. Given the added advantages of corporate investment, some cannabis advocates are concerned that Vermont’s recreational market has already been stacked against small independent producers.
“This kind of consolidation isn’t a surprise, unfortunately, but it’s happening even sooner than we anticipated,” said Geoffrey Pizzutillo, executive director of the Vermont Growers Association.
In other states that have legalized recreational use, he said, retailers who operate under large corporate umbrellas can afford to set artificially low prices to gain advantage over their competitors. The Vermont Growers Association has been advocating for municipalities to ensure greater equity in the cannabis marketplace, Pizzutillo said; several towns, including Burlington, adopted policies on Town Meeting Day that eliminate the five-month head start for medical license holders.
“We want a decentralized, craft-driven market,” said Pizzutillo, “so we can export our $20 gram just like we export our $10 IPAs.”