Dealing in Stocks & Buds: Cannabis Dispensary Goes Public

Rudy Ponce, of Oakland, selects and makes a purchase of medical marijuana at Blum Dispensary in Oakland, Calif., on Friday, Aug. 22, 2014. Photo: Dan Honda/Bay Area News Group

Merger offers opportunity for public to purchase shares in California medical marijuana dispensary

Call it a sign of the times as cannabis-grower Terra Tech Corp., announced its merger with Blum Oakland, a medical marijuana dispensary in Oakland, CA.

With more than 42,000 registered patients, Blum Oakland serves close to 1,000 patients daily. The merger with Terra Tech guarantees a “farm to table” approach, as the grower becomes the sole supplier for the dispensary, who started operating in 2012.

While California is not fully-legalized, prescriptions for Medical Marijuana are much easier to obtain than in many states, and that means big business for dispensaries like Blum Oakland, whose revenue over the last 12 months is more than $14 million.

From the press release:

“Today, we can proudly claim the title of the only US-based, publicly-traded company that touches every aspect of the cannabis lifecycle—from cultivation, to extraction, to branding, and now, with the acquisition of Blum, to retail sale,” said Derek Peterson, CEO of Terra Tech. “In addition to enhancing our cash-flow, this merger positions us to capitalize on the new regulatory landscape in California, which will change significantly with the implementation of the Marijuana Regulation and Safety Act in 2016.”  

The legislation Peterson is speaking of made the merger/purchase of Blum Oakland more attractive, largely because the act works to reduce extant competition, which in turn would certainly make it a major asset that could look good in any discerning trader’s portfolio.

Added to the regulations that would work out heavily in Terra Tech’s favor, is the ongoing efforts towards total legalization in California, which sets the stage for expansion and possibly franchising dispensaries, with a built-in supply chain, specialized (and proprietary) strains of cannabis and a familiar and trusted storefront.

In short, this merger could be the beginning of a “fast-food” approach to dispensaries in California and serve as a nationwide model.

While Terra Tech’s announcement is significant, they are not the first to publicly trade shares in a dispensary. Kaya Holdings, Inc. holds that distinction as they announced a public offering in April 2015 in their Portland, OR-based Kaya Shack dispensary.

As more and more states legalize the sale and production of cannabis, many dispensaries and grow operations could find themselves merging with the goal of achieving public funding, and as we are still at the dawn of a new age of cannabis commerce, it’s clear that the days of back alley dealing will soon give way to a different type of dealing, this time on Wall Street.

Hashim R. Hathaway (Uncle Shimbo) is the host of the Never Daunted Radio Network, and proud father to NeverDaunted.Net. You can reach him on Twitter @NeverDauntedNet