Colorado House Bill 1090, which takes effect on Nov. 1, allows for outside investors, including publicly traded companies, to jump into the state’s billion dollar marijuana industry. In anticipation, Colorado-based Medicine Man Technologies (MMT) has signed binding agreements to purchase a multitude of dispensaries statewide, including Niwot’s Starbuds outlet, along with four other stores in the chain.
Medicine Man Technologies co-founder and CEO Andy Williams testified to the Senate Finance Committee on behalf of passage of HB1090 and is part of the team of stakeholders involved in developing the framework for the bill signed by Governor Jared Polis in May of this year.
“These are exciting times as we move toward our ultimate goal of becoming a vertically integrated cannabis operator,” Williams stated in a press release.
MMT is on a binge these days, buying cultivation, extraction, research and development companies, along with cannabis brands and dispensaries. MMT’s cannabis consulting services, technologies and supplies are publicly traded under MDCL.
In addition to the Niwot store, the $31M MMT-Starbuds deal is for stores in Louisville, Longmont, Pueblo, and Commerce City. The sale arrangement is for $15 million in cash, 2.6 million of common shares at $2.98 per share and a year down the road, a cash payment of $7.75 million. The price paid per store is based on financial performance of each dispensary.
Starbuds Corporation has 13 Colorado locations, 8 of which are owner-operator run sites, the other five are run centrally.
Ernie Craumer, owner of the Niwot and Longmont Starbuds locations, described his stores as joint ventures with Starbuds Corporation. Operated by four members of the Craumer family, the Niwot store opened in November 2017 and the Longmont location on Ute Hwy and 75th Street opened in May 2018.
During the MMT payoff time period, Ernie Craumer, his wife Callie,