Marijuana MSO Curaleaf’s Virginia expansion unravels amid more lucrative offer

OG article by MJBizDaily Staff

December 24, 2025

Curaleaf Holdings, a New York-based multistate operator, terminated its agreement to acquire The Cannabist Company’s vertically integrated medical marijuana permit and assets in Virginia, originally announced on December 1 for $110 million. The deal included five dispensaries in the Richmond area, an 83,000-square-foot cultivation facility, and the right to open a sixth store, with closure planned for the first quarter of 2026. Curaleaf’s offer consisted of $80 million in cash upfront, $20 million payable within 30 days, and a $10 million promissory note at 6% interest. However, on December 19, 2025, The Cannabist Company, based in Massachusetts, announced a competing sale to an affiliate of Millstreet Credit Fund, a Boston-based hedge fund, for $130 million in cash plus assumption of a $30 million lease liability, totaling $160 million. This higher bid, subject to adjustment, aims to satisfy Cannabist’s debt due by the end of 2028. Curaleaf is entitled to a $3.3 million break-up fee from Cannabist. The shift occurred amid President Donald Trump’s executive order downgrading cannabis to Schedule 3 under federal law, potentially influencing the deal’s valuation, though the connection remains unclear. Virginia’s medical cannabis market is limited to five permits, generating nearly $30 million in sales for July and August under track-and-trace monitoring. Adult-use sales, expected next year under Democratic Gov.-elect Spanberger, could reach $780 million in the first year and $1.09 billion in the second, per MjBiz Factbook. A 2020 state study suggests capacity for 100-800 cultivation permits, 30-150 processing licenses, and 200-600 retail licenses. Other permit holders include Ayr Wellness (which sold its assets), Jushi, Green Thumb Industries, and Verano Holdings. Future regulations may favor existing operators like in Maryland or small businesses as in New York.