AYR Wellness Awarded Virginia’s HSA I Vertical Cannabis License

Virginia cannabis regulators granted conditional approval to award the final of five medical cannabis licenses—which had been tied up in litigation for years—to Miami-based multistate operator AYR Wellness.

The Virginia Cannabis Control Authority (CCA) announced Sept. 5 that its board members voted to award the Health Service Area (HSA) I license to subsidiary AYR Virginia after holding an open application in April.

Referred to as a “pharmaceutical processor” license in Virginia, the HSA I permit will provide the company sole rights to cultivate, process and sell medical cannabis in a 24-county region of more than 1.5 million people in the northern part of the state. This region includes the Shenandoah Valley, Charlottesville, Fredericksburg, Spotsylvania and Stafford.

Until now, Virginia’s HSA I region had been vacant of a medical cannabis license holder due to a failed 2019 merger between Los Angeles-based MedMen Enterprises and Chicago-based PharmaCann Inc.

MedMen ended up acquiring PharmaCann Virginia’s assets, including the HSA I conditional permit, in a terminated business merger settlement in 2019, but neither company started construction on a cultivation and production facility—a conditional requirement—and the Viriginia Board of Pharmacy rescinded the license.

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The rescinded license resulted in a legal dispute over the HSA I permit that’s left a gap in Virginia’s medical cannabis market ever since.

“Establishing a medical cannabis operator in HSA 1 is overdue,” CCA Board Chairman John Keohane said in a public statement. “Patients in this area have waited far too long to have access to the medical cannabis products they need. AYR Virginia’s entry into the market will make a significant difference in their lives.”

AYR plans to open a cultivation and processing facility in Clear Brook, located north of Winchester. The company will have one year to meet conditional requirements—such as progress toward constructing an operational and compliant facility—according to the CCA.

Once receiving a permanent license, AYR will be able to open as many as six dispensaries to serve medical cannabis patients in the commonwealth.

“We’re proud to have earned the opportunity to serve patients in Virginia, particularly in a region of roughly 1.5 million people that has lacked access to medical cannabis for some time,” AYR President and CEO David Goubert said in a press release. “This is an exciting moment for AYR, reflective of our continued efforts towards building our business to generate sustainable forward-looking growth.”

Upon entering Virginia’s limited-license market, AYR will join fellow medical cannabis operators Jushi Holdings, which operates six Beyond / Hello dispensaries in HSA II; Green Thumb Industries, which operates six RISE dispensaries in HSA III; The Cannabist Co., which operates five dispensaries in HSA IV; and Verano, which recently acquired the HSA V license with six dispensary locations.