CLS Holdings USA, Inc. (OTCQB: CLSH) announced on Wednesday plans to acquire 80 percent ownership interest in CannAssist LLC. The partnership further advances CLS in the rapidly expanding market in Massachusetts.
Jeff Binder, Chief Executive Officer of CLS Holdings USA said in a recent press release, “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 is ideally positioned for many cannabis cultivators looking to expand in the quickly growing industry. The state hosts a population of 6.9 million people and is with in a 100-mile radius from Rhode Island, Connecticut, New York, New Hampshire and Vermont. With less than 50 dispensaries in the entire state, the room for growth is sizeable.
Last year Massachusetts brought in USD 106,218,199 Million of legal cannabis sales. By 2021, medical sales in the state are expected to increase to USD 238,400,000 Million. While adult use sales are anticipated to grow to USD 929,300,000 Million the same year.
With very few dispensaries across the state and none located in Boston, the supply and demand of cannabis could be unproportionate. Since the inception of recreational use of cannabis in Massachusetts, it has faced many regulations and limitations.
Under the Cannabis Control Commission (CCC) there can be a maximum of 75 cultivators In Massachusetts up until October 2019, with no limit after that. The CCC limits each cannabis producer to 100,000 square feet of property for cultivation.
Obtaining a license for cultivation in the state requires an initial application fee of up to USD 3,000, while the license for a marijuana cultivator costs up to USD 15,000 and a license for a marijuana testing facility can cost up to USD 10,000.
CLS’s partnership with CannAssist optimally positions them to become a “significant entity” in the Massachusetts cannabis market.
Ontario-based CannAssist is a producer of pharmaceutical grade cannabis for medical use. The Company has applied for a state cultivation grow license with the City of Leicester, for plans to execute a 86,000 square foot facility on 88 Huntoon Memorial Highway. At that size the facility will become one of the top three facilities in Massachusetts. It is expected to produce its first harvest in the first quarter of 2020, yielding 28,000 pounds of flower along with 240,000 grams of extract.
CLS is expecting to generate substantial positive cash flow from the facility, as total revenues are anticipated to surpass USD 100 Million. Jeff Binder continued to comment on the partnership,“This opportunity fits into our stated objective of entering markets that are on the cusp of implementing a robust adult use market.”