While legal cannabis state markets are increasingly having to deal with distressed businesses and receiverships, some multi-state operators are taking the opportunity to expand their footprint with low-cost acquisitions.
In recent years some of the most notable receiverships took place in California, including Gold Flora, StateHouse Holdings, Herbl and MedMen. Other mature markets, such as Arizona, Colorado, Nevada, Michigan and Massachusetts have also seen a rise, according to Gordon Sattro of Green Life Business Group.
420 Property, which specializes in connecting cannabis business sellers and buyers, has over a dozen properties listed as “distressed sales.”
Grown Rogue targets Minnesota, Illinois
That sort of opportunity has not gone unnoticed by some companies that are currently looking to expand. Grown Rogue Unlimited, which operates in Oregon, Michigan and New Jersey, recently bought a turnkey cultivation site to enter the Illinois market.
“It’s a tough industry. Financing is really expensive in this space. There’s a lot of pressure on the balance sheets,” said Grown Rogue CEO Obie Strickler. “We’ve seen a few phases of distress, and I think the one that we’re seeing now is pretty significant. There’s a number of companies that are in receivership.”
As more companies are facing financial ruin, Grown Rogue is one of the companies that continues to grow.
Grown Rogue acquired a 49% stake in SEA Craft, which is leasing a cultivation site in Dwight, Ill., that was formerly operated by PharmaCann. The grow site has about 10,000 square feet of existing canopy with the capacity to expand to 14,000, according to Grown Rogue’s March 12 press release.
“I think it provides a really nice landscape for companies like Grown Rogue, and I think we’re uniquely positioned with our core model,” which is very focused on quality, customers, and strong KPIs [key performance indicators], said Strickler.
Strickler explained that along with Illinois, Grown Rogue also plans to open in Minnesota just as that market is getting off the ground.
“We’ve looked at Massachusetts, we’ve looked at Missouri, we’ve looked at some stuff in Pennsylvania,” he said. “We’re a little opportunistic in terms of our expansion,” he said. “By the end of 2026, the company plans to be operating in five states, Michigan, Oregon, Minnesota, Illinois and New Jersey.”
Vireo seeks to expand to 10 states
Meanwhile, Vireo Growth announced further expansions in the fourth quarter of 2025 during the company’s March 17 quarterly earnings call.
The Minneapolis-based company, which was originally just one of two medical operators in Minnesota, has bought its way into other state markets over the last two years. Most recently, the company announced acquisitions of Eaze, Schwazze and PharmaCann retail storefronts in Colorado. The company also announced its intent to close on Hawthorne Gardening Company from Scotts Miracle-Gro.
“All these transactions are expected to close within the next 2.5 months,” said Vireo Growth CEO John Mazarakis, “Following their completion, our operating footprint is expected to expand to 10 states and more than 160 dispensaries.
High hopes for rescheduling
Mazarakis also explained that Vireo Growth was expanding as part of its plan to benefit from rescheduling, whenever that actually takes place.
“I tend to focus on things we can control,” he said. “I think this is an event that will affect everyone positively. We look forward to that point in time. I think we’re going to be probably one of the first companies to take advantage of whatever comes out of it. We’re trying to build scale right now, and I think this is the time to do it.”
Safe Harbor Financial CEO Terry Mendez explained acquisition opportunities have increased in states with more mature markets and price compression, such as Massachusetts, which has seen more than two dozen cannabis receiverships in the last year,
“You can see what Vireo has acquired just here in Colorado. They acquired Green Dragon, Green Solutions, Livewell. They control roughly 47% of the shelf space in Colorado today,” said Safe Harbor Financial CEO Terry Mendez. “I see Vireo and Chicago Atlantic doing what Charles Dyson did in the [19]80’s, today in the cannabis industry.”
Mendez said he has been an advocate for that approach to cannabis business acquisitions, especially as certain markets have matured and more companies have struggled with economic pressure.
“It was an investment plan. Let me buy 10 distressed companies, buy out the debt for pennies on the dollar, put in a new management team, clean it up, repackage it, sell it to somebody else, and make a tremendous amount of money,” he said.
