Medical cannabis companies vying for a license in Staunton, Virginia, are in limbo, pending the outcome of a lawsuit filed by PharmaCann Virginia, which is owned by California-based MedMen, a major player in the dispensary market. PharmaCann Virginia was originally a subsidiary of PharmaCann, Inc., in Illinois but was later transferred to MedMen.
PharmaCann previously held the license for Health Service Area 1 (HSA1), where Staunton is located, and planned to set up shop through its PharmaCann Virginia subsidiary. But after a merger with MedMen fell through, MedMen took over PharmaCann Virginia, and PharmaCann left the picture. PharmaCann Virginia and its new parent company, MedMen, then missed their construction deadlines and lost the Staunton license.
It was expected that a new conditional permit for HSA1 would be awarded at the end of March 2021, when the Virginia Board of Pharmacy meets. But an ongoing September 2020 lawsuit by PharmaCann Virginia/MedMen to reclaim the license has put a hold on the whole process. The case is being heard in Henrico County’s circuit court, and the court has ordered that HSA1 licensing be halted, temporarily, according to News Leader.
As Outlaw Report recently reported, Georgia-based, minority-owned TheraTrue submitted a license application for a Staunton medical cannabis business and has already begun building local funding, connections and staff. TheraTrue Founder Paul Judge, who is Black, said medical cannabis is now “one of the most important and valuable agricultural crops ever,” and that the inequity in the industry, “as shown by the lack of Black ownership” is “extremely disappointing.” He added that TheraTrue is “excited to pursue the opportunity to provide medical cannabis products to qualified patients and also serve as an example to the rest of the country of a minority-owned medical cannabis company.” But for the time being, TheraTrue’s plans will need to be put on hold. The company did not respond to Outlaw Report’s request for comment.
In 2018, PharmaCann was one of five pharmaceutical cannabis companies to win a conditional license to set up shop in Virginia (one license was awarded for each of the Commonwealth’s five HSAs). PharmaCann purchased a facility in Staunton in 2019 Soon after, buzz about a major deal spread through the cannabis world: PharmaCann and MedMen—two major players in the industry—were to join forces in a $682 million merger. But in the fall of 2019, the merger was canceled. MedMen was awarded PharmaCann Virginia and the HSA1 license in the fallout.
“PharmaCann has agreed to transfer certain cannabis licenses and related assets in Illinois and Virginia to MedMen for no additional consideration from MedMen, other than the forgiveness of certain debt,” according to a MedMen statement. “License for vertically integrated facility in Virginia,” is listed as among the assets PharmaCann lost in the termination.
MedMen/PharmaCann Virginia held the Virginia license but failed to start construction in Staunton on time. In 2020, MedMen asked for an extension of the timeline to launch but the Virginia Board of Pharmacy refused. It revoked the HSA1 license and sent out a new Request for Applications (RFA).
Though the RFA process moved forward, PharmaCann Virginia filed a lawsuit in September 2020, against the Virginia Board of Pharmacy in Henrico County’s circuit court, regarding the HSA1/ Staunton license. Several hearings have since been held in the case, including in March. Until the judge makes a ruling, the Board of Pharmacy will hold on to the HSA1 license. PharmaCann Virginia’s attorney had not responded to Outlaw Report’s contacts at the time of publication, nor had MedMen or PharmaCann..
Virginia’s current functioning medical cannabis locations include Beyond/Hello in Manassas, Dharma Pharmaceuticals in Bristol, Green Leaf Medical in Richmond, and Columbia Care in Portsmouth. In 2020, licensed processors were formally permitted to open an additional five satellite dispensaries in each of their areas, for a total of 25 future stores.
“I personally don’t think we should be arresting or penalizing somebody for something we’re getting ready to legalize,” Northam toldVPM March 24. “I plan to place a number of amendments in front of the legislature and hopefully we’ll be able to move those forward.”