How a Chicago pot firm turned into a $3B behemoth in just 3 years

Verano Holdings, based on the Near North Side, is now one of the largest marijuana companies in the country after it started trading publicly in Canada last week.

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Verano Holdings at 415 N. Dearborn St. on the Near North Side.

Verano Holdings at 415 N. Dearborn St. on the Near North Side.

Mengshin Lin/Sun-Times

High on a nearly $3 billion valuation, Verano Holdings has become the latest Chicago cannabis firm to start trading publicly in Canada.

In less than three years, the Near North Side company has culled together a marijuana empire that spans 12 states, with eight cultivation sites and 54 stores, including in Aurora, Naperville and Prospect Heights. Verano now touts itself as “one of the three largest multi-state operators in the U.S.,” a designation typically reserved for corporatized weed firms.

Spokesman Dennis Culloton noted that Verano “has been able to grow organically and nationally through mergers and acquisitions.” Earlier this month, Verano announced the closing of a crucial merger deal with Florida-based AltMed that led to $100 million in new funding and allowed the company to trade publicly in Canada.

The company’s CEO, George Archos, now holds stock worth hundreds of millions of dollars after three days of trading.

Bullish investors have bet on Illinois’ expanding pot business, allowing Verano to use a flood of private capital to fan out across the country with relative ease — much like GTI and Cresco Labs, the other publicly traded cannabis firms based in Chicago.

“I don’t think there’s much difference,” said cannabis consultant Andy Seeger. “Verano has a little less history, but [it’s] largely the same model: Get money, get big, grab market share.”


Verano CEO George Archos

Verano Holdings

Founders’ connections

Like GTI and Cresco, Verano’s meteoric rise can be traced back to the beginning of Illinois’ experiment with medical marijuana.

Archos previously partnered with influential cannabis consultant Ross Morreale to launch Ataraxia, which became the first firm licensed in Illinois to start legally cultivating weed in July 2015, four months before medical cannabis sales began.

Originally from the western suburbs, Archos is a serial entrepreneur who co-founded Wildberry Pancakes & Café, which has four locations in Chicago and the suburbs. Archos previously told the Sun-Times he was encouraged to get into the medical cannabis industry after seeing the drug’s healing effects on a cousin with multiple sclerosis.

Morreale helped start the Medical Cannabis Alliance of Illinois, an industry group whose membership has included many of the state’s other early operators. His sister, Kim Morreale, is the wife of former state Rep. Michael McAuliffe (R-Chicago) and a former director of the Illinois Department of Transportation. She also previously served as a spokeswoman for the trade group.

Ross Morreale ultimately left Ataraxia in the summer of 2018, just three months before Verano launched the following October with $120 million in private funding. The new company took control of the grow operation, along with Archos’ Zen Leaf dispensary brand and other entities.


A Verano product sold at Verilife Marijuana Dispensary in southwest suburban Romeoville on the first day of legalized recreational cannabis in Illinois, Wednesday, Jan. 1, 2020.

Ashlee Rezin Garcia/Sun-Times

As deals fizzled, Verano capitalizes

After its launch, Verano began cementing its status as a premier pot firm by going on a merger and acquisition streak after its own $850 million acquisition went up in smoke last year.

Although Illinois’ cannabis industry is heavily regulated and the pursuit of new licenses is increasingly competitive, operators of cannabis businesses can sell their permits to other firms hoping to expand their reach or establish a foothold in Illinois. Since marijuana was fully legalized last year, highly capitalized companies have bought up smaller, independent pot shops — albeit it at sky-high prices of as much as $15 million per dispensary.

In March 2019, Verano agreed to be acquired by Arizona-based Harvest Health & Recreation. But the merger died, and the two companies issued a statement blaming “prolonged obstacles in meeting requirements for state and local regulatory authorities needed to transfer ownership and operational licenses, adverse capital market conditions [and] a challenging environment for asset sales.”

Harvest also tried — and failed —to buy out a Highland Park pot shop called Elevele later that year.

In a twist of fate, Verano was able to acquire Elevele last year. Verano now controls the Highland Park dispensary and has used an additional license granted to that store to run a shop in Arlington Heights, which is operating as one of Verano’s Zen Leaf dispensaries.

Those two are part of the company’s growing Illinois portfolio, which includes licenses for Ataraxia’s cultivation facility and eight dispensaries, including two that are jointly owned with fellow Chicago-based pot giant Green Thumb Industries. Culloton said the company hopes to lock down two more Illinois pot shop licenses by the end of April.

The aggressive deal making in an industry that is expanding rapidly as more and more states legalize medical or recreational marijuana — or both — has paid off for the company’s owners.

By the close of trading Friday, the company’s stock was valued at $31.99 per share in Canadian dollars. Converted to U.S. currency, the company’s total valuation has now jumped to $3.2 billion.

Archos holds roughly 11% of the shares — worth more than $360 million.

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