On April 1, Atlanta-based multi-state cannabis operator Parallel announced that it paid $60 million in cash, $40 million in stock and up to $55 million of additional incentives for leftover sites from an Illinois dispensary chain that sold the majority of its locations last month.
After raising $225 million in February through a Special Purpose Acquisition Corporation (SPAC) process that valued the company at $1.9 billion, Parallel raised expectations that it was preparing to acquire six Illinois dispensaries owned by Windy City Cannabis.
So, it was no surprise Thursday when Parallel announced it was acquiring dispensary locations in Homewood, Highwood, Posen, and Litchfield previously owned by Grassroots Cannabis, as well as additional locations in Macomb and Carpentersville scheduled to open later this month.
Although two different companies, Grassroots Cannabis and Windy City Cannabis were both operated by Steven Weisman through a complex ownership agreement.
Due to Illinois requirements that cap the ownership of 10 dispensaries to one company, these locations were not transferred to Wakefield, Mass.-based Curaleaf as part of its $830 million acquisition of Grassroots that otherwise finalized last year. Last month, Curaleaf announced it would be acquiring the Chicago-based Windy City Cannabis location as well as multiple Greenhouse dispensaries in Illinois to finalize the deal.
A Litchfield-based cultivation facility previously owned by Grassroots transferred to Curaleaf last year.
New price ceiling for Illinois
The potential $155 million purchase price for three medical dispensaries and three “plus one” recreational dispensaries in Illinois exceeds what out of state cannabis operators were paying last year for dispensary licenses owned by incumbent medical operators.
In December 2020, New York-based Ascend Wellness Holdings paid an estimated $25 million for medical and “plus one” dispensaries owned by Chicago-based Midway Dispensary. In April, Ascend is believed to have paid $30 million for medical and “plus one” dispensaries owned by Chicago-based Modern Cannabis.
Ascend, along with Chicago-based Green Thumb Industries, Cresco Labs, Verano Holdings and Pharmacann are all vertically-integrated, with enterprise cultivation and manufacturing capacity along with multiple dispensaries.
As vertical integration in limited licensed states with high populations constitutes the 2021 pot playbook, it is possible Parallel could be in play to acquire one of the remaining independently owned cultivation facilities in Illinois, as well as an additional four dispensaries.
Parallel operates a cultivation facility and 39 retail locations in Florida, two stores in Massachusetts, one store in Nevada, a delivery service in Texas and plans to soon establish a presence in Pennsylvania.
Investor and chewing gum magnate William “Beau” Wrigley became CEO of the company in 2019.
In 2006 around the end of his tenure as CEO of his iconic Chicago-based family business, Wrigley established the Wrigley Science Institute to study the oral benefits of gum chewing.Parallel’s new Highwood location, by this reporter’s estimate, is believed to be the closest cannabis operator to the 11,000 square-foot Lake Forest mansion Wrigley sold in 2012 for $5.9 million.