The Cannabis Control Commission on Thursday approved the sale of New England Treatment Access, the company with Northampton and Brookline retail marijuana stores and a cultivation facility in Franklin, but not before commissioners raised concerns about the buyer’s track record in Florida.
The vote was unanimous in favor of the sale to Georgia-based Surterra Wellness, led by the former head of the Wrigley chewing gum empire William “Beau” Wrigley Jr., but commissioners added conditions to require Surterra to submit plans to comply with Massachusetts regulations around edible products, advertising and marketing.
Those conditions, requested by Commissioner Kay Doyle, stemmed from reports that a Surterra facility that processes marijuana products was shut down for having not completed a food safety inspection and that the company violated Florida restrictions around advertising and marketing of medical marijuana products.
Patrick Beyea, the CCC’s director of investigations, told commissioners that he reached out to his counterpart at the Florida medical marijuana program to ask about the company’s track record. The Florida official, Beyea said, could not share too many details because of patient privacy requirements.
“But she did say that Surterra was in compliance with everything and that any deficiencies that have been observed in past inspections have been corrected and they are in good standing with the Florida medical marijuana program,” he told the CCC on Thursday.
Commissioner Shaleen Title asked Beyea about a settlement related to an employee separation. The investigations chief said the agreement was a “confidential and mutually-agreeable settlement” that did not raise any red flags for his staff.
A year since it began licensing marijuana businesses, the CCC has now trained an eye on a smattering of requests for changes in control or ownership of the companies that make up the state’s fledgling legal marijuana industry. The flurry of requests comes amid reports about creative corporate tactics to bend state rules governing how many licenses any one entity can control.
The sale of NETA to Surterra was the fifth change of control or ownership application approved by the CCC. In April, the panel OK’ed ownership changes for East Coast Organics, Caregiver-Patient Connection and Alternative Therapies Group.
The CCC also approved the sale of Sira Naturals to Cannabis Strategies Acquisition Corp. in late May.
A business must seek and receive approval from the CCC if any individual or entity would acquire or increase its ownership to 10 percent or more of the equity in the business, or if a person or entity would control or appoint more than 50 percent of the voting equity, or hold contract rights to control.
No changes can take place until the CCC has approved the change in control or ownership, and failure of a business to obtain CCC approval before making changes could result in a license being deemed void, the CCC said.
A business seeking to make a change in its ownership or control can request that the change apply to as many licenses as it holds, but the business must pay a separate $500 change of ownership fee for each license.
Surterra Wellness said that its cash and stock transaction to acquire NETA would be “one of the largest acquisitions to date in the U.S. cannabis industry,” when it announced the planned acquisition in January. Surterra said the NETA team “will continue their operations at all levels in Massachusetts, including offering its established brands to its patients and customers and partnerships with the communities.”
Surterra describes itself as “one of the fastest growing health and wellness companies in the United States” and already has a presence in Florida, Texas and Nevada. The company said the acquisition of NETA reflects its “strategy to bring the industry’s broadest portfolio of high-quality cannabis brands to patients and consumers across the U.S., to build out industry-leading operations and to expand upon a global platform.”
“Surterra’s continued growth and industry leadership will offer NETA’s employees an opportunity to join in a shared vision to ascend to a leading global health and wellness company,” NETA co-founder Kevin Fisher said in a statement when the sale was announced. “At the same time, we continue our commitment to providing NETA’s high-quality products to our patients and customers in Massachusetts and to meeting the obligations of our Brookline, Franklin, and Northampton communities.”