Medicine Man Denver, a Colorado-based cultivator and retailer, and Schwazze, formerly Medicine Man Technologies, terminated their agreement, effective Aug. 20.
Medicine Man Technologies formerly operated as the consulting arm of Medicine Man Denver.
The deal was terminated Aug. 13, according to Schwazze’s second-quarter earnings release.
Andy Williams, president and co-founder of Medicine Man Denver, said in a release that “Medicine Man will continue to help lead the growth of the Colorado cannabis industry to ensure our state maintains the leadership position in the U.S. cannabis industry we enjoy.”
Williams also announced that Medicine Man Denver will begin a new search for a partner with “a desire to have a deep presence in the Colorado market with partners that have been leaders in this industry since its inception in 2009.”
According to Mike Regan, an equity analyst and managing member of Denver-based MJResearchCo., the news indicates the companies will likely pursue similar Colorado consolidation strategies.
“With capital tight, but potentially loosening in the next couple months, if there are regulatory improvements, it is not surprising that Schwazze CEO Justin Dye would rather look for new deals rather than execute deals struck 12-18 months ago by a different CEO,” Regan said.
Regan expects Medicine Man Denver to look for new targets and a new source of funding to pursue a similar strategy.