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As the Garden State awaits another legalization bill vote and more requests for applications (RFAs) for the medical program, the acquisition game in New Jersey is nonetheless heating up. While the potential legalization of cannabis has energized many potential legitimate entrepreneurs, a common refrain continues to echo throughout the industry -- big business is here and snapping up licenses.

In the past few weeks, an international cannabis company and a multi-state cannabis company have respectively taken steps to acquiring companies with a foothold in New Jersey: Canopy Growth last week secured its option to buy Acreage Holdings following the triggering event of federal permissibility of cannabis; and Harvest Health and Recreation acquired CannaPharmacy, which operates Garden State Dispensary in Woodbridge.

Canopy Growth has spent $300 million on its option to buy Acreage for $3.4 billion, following the triggering event. The terms of Harvest Health’s deal with CannaPharmacy haven’t yet been disclosed.

It should also be noted Ontario-based Canopy received a $4 billion investment last year from Constellation Brands, the Fortune 500 alcohol company which produces Corona and Modelo beers, Svedka vodka as well as Woodbridge and Robert Mondavi wines, among others.

Both of these cannabis powerhouses have not just one but two routes into New Jersey: Canopy Growth entered into a deal with TerrAscend, the Canada-based majority owner of NETA-NJ, in 2017; and Harvest Health signed a definitive agreement on Tuesday to acquire Verano Holdings, the parent company of the recent licensee, Verano NJ, LLC, for $850 million in stock.

Given the significant amount of capitalization behind these operators, criticism continues to bubble in the industry as to whether the landscape will provide opportunities to mom-and-pop’s or solely to deep-pocketed companies.

Still, the deals face regulatory scrutiny with respect to license changes in the Garden State, and it appears unlikely for the time being any one company will be able to secure more than one license.

Jeff Brown, assistant commissioner for the Department of Health’s medicinal marijuana program, said management services agreement or changes in ownership for Alternative Treatment Centers (ATCs) are subject to approval by the health department.

“The existing ATCs, the current 12, are not only subject to the department’s approval (for ownership changes) but to the terms of the various RFAs,” Brown told NJ Cannabis Insider.

Under the RFAs, the health department’s selection methodology for licensees has been one permit per entity, Brown said. Moreover, before any ownership changes can happen, the same vetting process and criminal background check undertaken by licensees is required of those seeking to acquire licensees, he said.

Brown said the Department of Health had received a request to review Harvest Health’s proposed acquisition of CannaPharmacy, but hadn’t received any such request for Verano.

Brown added the department hadn’t received any other recent requests for ownership changes.

This story first appeared in NJ Cannabis Insider.

Justin Zaremba may be reached at jzaremba@njadvancemedia.com. Follow him on Twitter @JustinZarembaNJ. Find NJ.com on Facebook.

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