The Massachusetts Cannabis Control Commission was all set to approve a Canadian company’s acquisition of Sira Naturals, but regulators pumped the brakes and called for greater scrutiny into the deal—and into similar deals moving forward.
In October 2018, Toronto-based Cannabis Strategies Acquisition Corp. announced that it would acquire Sira Naturals. The company trades on the Nasdaq, and its management team combined the Sira Naturals news with acquisitions of four other cannabis businesses in Nevada and Colorado. Cannabis Strategies Acquisition Corp. is a SPAC, which means that it leverages public investments for private equity transactions.
Sira Naturals holds vertically integrated licenses, and currently operates three dispensaries in the state.
The request to change ownership is a sensitive topic in Massachusetts and elsewhere right now, in light of rapid market consolidation and especially in light of a recent Boston Globe report on major companies asserting ownership of more than the allowable number of cannabis business in the state. Regulatory approval is needed to complete these M&A transactions in the cannabis space, and recent debates over the expanding scope of ownership for some multi-state operators has prompted questions about who’s moving into a particular state-legal cannabis market.
At its May 16 meeting, the state’s Cannabis Control Commission pushed back on Cannabis Strategies Acquisition Corp. During the debate over the recommendation to approve this transaction, commissioners decide to pursue even more records from the Canadian company.
Commissioner Shaleen Title said, “It’s in the public’s interest to scrutinize these transactions.”
She requested that the commission seek “all legal documents that address this transfers of ownership, whether public or not.”
Prior to the meeting, the commission’s leadership team had performed its required due diligence on the transaction and offered a recommendation to approve the deal.
“In this instance, I want to thank the staff,”