Curaleaf (CURLF) announced on Dec. 2 that it has entered into an agreement with The Cannabist Company (CBSTF) to acquire a cultivation site and five dispensaries in Virginia on the same day that the state legislature released new details about the proposed rules to govern Virginia’s impending adult-use market.
The tentative transaction agreement includes a 15 business day go-shop period which ends on Dec. 22. During that time, The Cannabist Company could accept a better offer if it comes along, but if that happens or the transaction is rejected by The Cannabist Company’s debt holder, then Curaleaf would be entitled to a $3.3 million break-up fee with up to $350,000 in additional expense fees.
The entire transaction is expected to cost Curaleaf $110 million, according to The Cannabist Company’s own announcement of the deal. The Cannabist Company’s Board of Directors recently formed a special committee to review “strategic alternatives” to the company’s ongoing financial problems.
The Cannabist Company recently reported it lost $14.2 million on $79.9 million in revenue during the third quarter of the year, which ended on Sept. 30. The company made $114.8 million in revenue during the same quarter in 2024. So far, the company lost a total of $124.3 million in 2025. The company also only has about $17 million in available cash.
Curaleaf expects the deal, which includes the rights to open a sixth dispensary, will close by the end of 2026.
The move reflects a continued retraction of Cannabist’s national footprint while reaffirming MSO dominance of Virginia’s medical cannabis market. The deal would increase Curaleaf’s reach to 24 states, while The Cannabist Company would shrink to 11 states.
Virginia may launch adult-use market in 2026
The sale could prove to be strategic timing for Curaleaf as Virginia moves closer to launching an adult-use cannabis market with the election of Democrat Gov. Abigail Spanberger.
The Virginia legislature’s Joint Commission to Oversee the Transition of the Commonwealth into a Cannabis Retail Market released proposed regulations for that market on Dec. 2. Existing medical operators will be able to convert to adult-use licenses.
“Our goal has been to listen. I think we have,” said State Delegate Paul Krizek during the commission’s Dec. 2 meeting. “This bill hopefully has a little for everybody. It builds a new market that supports hundreds of small businesses and strengthens Virginia agriculture, reduces the racial disparities created by the prohibition of marijuana, and most importantly protects public safety and health.”
Krizek, who serves as the commission’s chair, said that he expects legalization to generate more than $400 million in projected revenue over the market’s first five years.
“We’ll be using the revenue to support youth-focused prevention and education efforts,” he said. “Taxes are going to go into the business loan fund and the cannabis equity reinvestment fund, which also will invest in community programs and youth services.”
The new regulations would change the status of “microbusiness” licenses to “impact licensee.” This new status is reserved for applicants who have a prior cannabis-related conviction or have resided in an economically disadvantaged district based on U.S. census tract data.
Microbusinesses would be allowed to grow 3,500 square feet of indoor canopy or 10,000 square feet outdoors.
Virginia’s Cannabis Control Agency would begin accepting applications for new licenses on July 1, 2026. The state would prioritize approving microbusinesses, with 100 new licenses expected by Sept. 1, 2026.
The rules would allow for up to five licensed industrial hemp processors to convert to legal cannabis. Municipalities will not be able to opt out of allowing cannabis businesses.
MSOs control state’s medical cannabis market
Virginia has had a medical cannabis market since 2020. The state’s legislature legalized adult-use cannabis in 2021, but the law required further work to craft regulations to govern an adult-use market, which Republican Gov. Glenn Youngkin repeatedly vetoed. Youngkin assumed office in early 2022, but the state’s four-year term limit led to an open election in which Spanberger won. She has repeatedly said she would sign legislation to launch adult-use retail sales.
Curaleaf will take over operations in the south-central portion of the state, while Verano Holdings (VRNO) controls the eastern region. Ayr Wellness (AYRWF) will operate in the northwestern region, though the company has yet to open its first dispensary in the state.
Jushi Holding’s (JUSHF) Dalitso LLC operates six dispensaries under the Beyond/Hello brand in northern Virginia, and Green Thumb Industries operates six dispensaries in the southwestern portion of the state.
Cannabist previously held licenses to operate in two of the state’s five medical regions. The company sold one of those stakes, along with a cultivation site and six dispensaries, to Verano in mid-2024.
At the time, the deal involved a sale of Virginia and Arizona properties and was presented as part of a larger plan by The Cannabist Company to continually divest months after a proposed merger with Cresco Labs (CRLBF) fell through.
