February 03, 2017 | SteveElliott
Uncle Ike’s and Main Street Marijuana are up for sale-for $50 million.
Want to become an instant marijuana mogulin Washington state? Here’s your chance: You just need $50 million, and you’ll own the state’s two biggest chains.
The No. 1 and No. 2 Cannabis retail chains in the state on Jan. 16 announced they were up for sale as a package deal, Uncle Ike’s owner Ian Eisenberg confirmed to the Leaf.
Ramsey Hamide, who owns Vancouver-based Main Street Marijuana, and Eisenberg have three storefronts apiece. They’re offering up the combined six shops for the $50 million price tag, reports John Schroyer at Marijuana Business Daily.
The period of uncertainty represented by the incoming Trump administration is certainly one major factor in the decision to sell. With virulently anti-Cannabis attorney general nominee Jeff Sessions as the top law enforcement officer in the land, all bets could be off.
But another factor, Eisenberg told the Leaf on Jan. 17, is the likelihood of out-of-state investors being welcomed into the state’s retail Cannabis industry.
“With multiple bills in Olympia to open the I-502 market up to out-of-state ownership, the timing seems right,” Eisenberg told us. “The Republicans seem hell-bent on allowing out-of-state ownership of Cannabis business and crushing our fledgling cottage industry, the timing sort of feels right to put our feelers out.”
Main Street and Uncle Ike’s combined in 2016 to bring in total retail sales of more than $64.8 million, according to 502data.com, which uses data from state government. About $34.4 million of that comes from Main Street, and $30.4 million from Uncle Ike’s.
Their closest competitor in terms of revenue, New Vansterdam in Vancouver, Wash., had sales just over $20.6 million in 2016, according to the site.
Under current I-502 rules, anyone who invests any funds in a Washington state-licensed marijuana business is required to have been a resident of the state for at least six months, said Cannabis attorney Hilary Bricken. That means out-of-staters have only been able to participate in the state’s legal weed market by providing property to licensees (as landlords), by selling or leasing of equipment to licensees or by providing consulting services.
Those who back the idea of opening Washington’s marijuana market to out-of-state money say that such a move would make capital more readily available. Cannabis businesses, of course, need investment capital in order to grow and compete. Some other states with legal marijuana markets are more permissive in allowing out-of-state corporate investments, so we’re told Washington needed the same to remain competitive. Those of a more cynical bent said what little hope mom-and-pop entrepreneurs currently have to establish a viable marijuana business could be all but extinguished by opening the floodgates to big corporate money from outside the state.
Even those in favor of opening investment to out-of-staters have acknowledged the need for restrictions to ensure that big corporations with big money aren’t allowed to dominate the state’s Cannabis market.