CLS Holdings USA, Inc. recently announced on Wednesday its plans to acquire 80 percent ownership interest in CannAssist LLC. The partnership further plans to advance CLS in the rapidly expanding market in Massachusetts.
In a recent press release, Jeff Binder, Chief Executive Officer of CLS Holdings USA said: “The market dynamics in Massachusetts are compelling for large scale cultivation. The current cultivation in Mass is approximately 800k square feet, while demand is expected to exceed 8,000,000 square feet.”
Massachusetts has the added advantage of being ideally situated for cannabis cultivations on the lookout to expand in the rapidly growing industry. With a population of 6.9 million people, it is located within a 100-mile radius from Rhode Island, Connecticut, New York, New Hampshire, and Vermont. Having less than 50 dispensaries in the entire state, the room for improvement is significantly high.
Just last year Massachusetts brought in $ 106,218,199 Million worth of legal cannabis sales. By 2021, it is expected that medical sales in the state will increase to $ 238,400,000 Million. Meanwhile adult user sales are likely to grow up to $ 929,300,000 Million during the same year.
With few dispensaries across the region and absolutely none in Boston, the supply and demand of cannabis are severely unbalanced. Since the advent of recreational use of cannabis in Massachusetts, it has faced numerous litigations and limitations.
According to the Cannabis Control Commission (CCC), there can be a total of 75 cultivators in Massachusetts as of October 2019, with no limit afterward. The CCC limits each cultivator to produce up to 100,000 square feet of property for cultivation.
For cultivation in the state costs an application fee of up to $ 3,000, while the license for a cannabis cultivator can cost up to $ 15,000. Moreover, the license for a cannabis testing facility can cost as much as $ 10,000.
CLS’s partnership with CannAssist positions them such that they can become a “significant entity” in the Massachusetts cannabis market.
CLS expects to generate considerable profits from the facility, with total revenues likely to surpass $ 100 Million. Jeff Binder further commented on this partnership by saying, “This opportunity fits into our stated objective of entering markets that are on the cusp of implementing a robust adult use market.”