Small Maryland Town With 5% Equity In Trulieve's Operation Wants Its Fair Share Of The Profits

A small town in Western Maryland with equity in the local cannabis operation run by medical marijuana giant Trulieve Cannabis TRUL TCNNF is seeking its fair share of the profits, reported The Washington Post.

What Happened

Hancock, population 1,543, got into the industry in 2015 via a deal with Harvest Inc., which went public in 2020 and was acquired by Trulieve in 2021 in a $2.1 billion merger. 

To address high poverty and unemployment, Hankcock officials agreed to launch a medical cannabis cultivation and processing facility in the town in return for a 4.99% equity in the business.

Then Things 'Changed'

Trulieve was among the first to undertake recreational cannabis sales on July 1 in Maryland. CEO Kim Rivers, who is a keynote speaker at the upcoming Benzinga event in Chicago, said at the time that her company is "proud to be part of history as the state expands to include adult use."

In just the first seven days after sales got underway, cannabis shops pulled in $20.9 million for a total of $87.43 million for the first month of sales.

Can We See An Accounting Of The Profits?

Now, Hancock wants a full accounting of Trulieve's profits, including recreational marijuana sales.

Daniel Murphy, the town's Mayor at the time the deal was enacted said recently that there's "something in the air that makes me feel like things have changed."

Steve White, then-chief executive of Harvest and now president of Trulieve, said the town would "receive what we had agreed accounts for a 5% equity interest in the business" when asked to provide more clarity on how legalization sales will affect the ongoing deal with Hancock.

"They will receive more money if the entity in Maryland does better," he wrote in an email.

However, during a recent Facebook chat with residents, Town Manager Michael Faith said there is "disagreement" on what exactly "constitutes a profit."

To date, Hancock obtained $703,193.96 related to the deal.

What's Next

On August 30, Trulieve and Hancock will participate in a mediation session.

Keep on top of such issues at the Benzinga Cannabis Capital Conference in Chicago Sept 27-28. Get your tickets today before prices go up and secure a spot at the epicenter of cannabis investment and branding.

Photo: Courtesy of Hvoenok and GOR Photo on Shutterstock