On Jan. 9, 2017, MedMen, a turnkey marijuana management company based in California, acquired Bloomfield Industries, one of New York’s five organizations licensed to grow and distribute medical marijuana, as reported by Politico.
According to the New York State Department of Health, the acquisition does not constitute a license transfer, which state law prohibits; instead it is classified as a change in ownership, which is allowed with the NYSDOH’s approval.
Bloomfield Industries, based in Staten Island, struggled during New York’s first year of sales. At one point, the company recorded losses of more than $500,000 per month, prompting the company to start seeking investors for an infusion of capital.
Specifics of the deal between the two companies have not been released. “It is our policy not to comment on active investments,” said Daniel Yi, a spokesman for MedMen, to Politico.
New York’s medical marijuana program has had issues of low enrollment and patient’s struggling to access medical marijuana, so the NYSDOH has started to take steps in an attempt to strengthen the program.
On Aug. 30, 2016, the NYSDOH announced that it would expand the program by authorizing nurse practitioners to certify patients, allowing home delivery service and instituting a fee waiver for patients with financial constraints, among others. On Dec. 1, the NYSDOH added chronic pain as a qualifying condition; then, on Dec. 8, the department approved medical marijuana wholesaling among the state’s five licensed organizations.
While the NYSDOH’s two-year report recommended that five more organizations be licensed within the next two years, the department has yet to adopt that recommendation and some see this as a good thing.
“[Bloomfield] is a reminder that we are dealing with a micro-market for medical marijuana and contemplating at this time the issuance of new licenses makes no sense whatsoever,” said Ari Hoffnung, CEO of Vireo Health, to Politico. “All of the registered organizations are experiencing financial challenges. No one has made a profit and no one is at break even yet and this is a reminder that issuing new licenses is premature.”