Verano Archives - Page 2 of 4 - Green Market Report

StaffAugust 16, 2022


The Daily Hit is a recap of cannabis business news for August 16, 2022.


Verano Revenue Rises But Misses Estimates

Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF) announced its unaudited financial results for the second quarter ended June 30, 2022, with revenue increasing 12% to $224 million versus the same time period in 2021. The company also trimmed its net losses to $10 million from last year’s net loss of $30 million. Read more here.

Greenlane Revenue Drops, Looks to Sell KushCo

Greenlane Holdings, Inc. (NASDAQ: GNLN) slumped in trading Tuesday morning with company revenue dropping, as it moves to offload its packaging division — KushCo — in order to reinvest in its brand houses and find more profits. The smoking accessory e-commerce platform reported financial results for the first quarter ending June 30, 2022. Read more here.

InterCure Beats on Earnings, Revenues Rise Amid Global Expansion

InterCure Ltd. (NASDAQ: INCR) (TSX: INCR.U) posted positive results despite barely missing revenue expectations, as the company looks to further its international reach and shore up its new-found partnerships. The Israeli-based cannabis company — also known as Canndoc — reported its financial report card for the second quarter ending June 30, 2022. Read more here.

Halo Shores Up Losses as Revenue Rises

Halo Collective Inc. (NEO: HALO) (OTCQB: HCANF) posted mostly positive results with revenues ticking up over the quarter — illustrating the west-coast operator’s pursuit to shave losses and pay down debt. The company announced its financial results for the first quarter ending June 30, 2022. Read more here.

The Parent Company Revenues Fall as Losses Persist

After the market closed on Monday, TPCO Holding Corp. (OTCQX: GRAMF) posted results that missed expectations as the company restructures and recovers from record losses. The west-coast cannabis company delivered its financial results for the second quarter ending June 30, 2022. Read more here.

Fieldtrip Health is Now Reunion Neuroscience

Field Trip Health has changed its name to Reunion Neuroscience Inc. (TSX: FTRP) (Nasdaq: FTRP) and reported its fiscal first quarter 2023 results for the period ending June 30, 2022. Reunion reported expenses of $5 million and a net loss of $13 million. The increase in net loss from the prior year primarily reflected the company’s focus on investing in RE104 which recently began its Phase 1 clinical trial, as well as increased public company costs. Read more here.

Psychedelic Companies Grapple With Next Steps

The emerging psychedelics industry is stuck with a sort of default business model that goes something like this: build a team of entrepreneurial-minded C-suite people, add a few qualified medical people, get a patented psychedelic molecule or compound to test and develop, build a research and development operation, then begin the clinical trials as quickly as possible while keeping antsy investors believing in the long-term value of the tenuous business journey that you and they have all embarked on. Read more here.


Indiva Limited

Indiva Limited (TSXV: NDVA) (OTCQX: NDVAF), a Canadian producer of cannabis edibles and other cannabis products, is pleased to announce its financial and operating results for the second fiscal quarter ended June 30, 2022. Read more here.

Item 9 Labs Corp.

Item 9 Labs Corp. (OTCQX: INLB) —a vertically integrated cannabis dispensary franchisor and operator that produces award-winning products—today reported its fiscal third quarter operating and financial results for the nine months ended June 30, 2022. Read more here.

AmeriCann Inc.

AmeriCann Inc. (OTCMKTS: ACAN), a cannabis company that develops state-of-the-art cultivation, product manufacturing and distribution facilities, announced the release of financial and operational results for its fiscal quarter ending June 30, 2022. The company achieved a significant increase in year-over-year quarterly net income and revenue, with both being records for the company for the quarter ending June 2022. Revenue increased over 36% for the quarter ended June 2022 relative to the quarter ended June 2021, an increase of $213,188. Quarterly gross margins were 98.5%. Read more here.

Puration, Inc.

Puration, Inc. (OTC Pink: PURA) today announced an agreement remains in the works that is anticipated to result in a cash infusion within the next 90 days. Management expects the cash infusion to fuel a transition of the company’s overall cannabis market strategy. The marijuana cultivation license recently announced by PURA’s sister company, North American Cannabis Holding’s Inc. (OTC Pink: USMJ) has triggered an overall initiative for PURA and USMJ to evolve their respective cannabis market strategies to take advantage of the license and to adapt to the latest market conditions. Read more here.

Optimi Health Corp.

Optimi Health Corp. (CSE: OPTI) (OTCQX: OPTHF) (FRA: 8BN), a Canadian-based company licensed by Health Canada to produce natural, scalable, and accessible psychedelic and functional mushrooms for transformational human experiences, has received permission from Health Canada to manufacture and distribute additional psychedelic substances, most notably MDMA, under the amended terms outlined in its June 20, 2022 application to Health Canada. Read more here.

Psycheceutical Bioscience, Inc., Vici Health Sciences

Psycheceutical Bioscience, Inc. (OTC: BWVI), a bioscience company developing cutting-edge technologies for the next generation of mental health treatment, announced that it has entered into an exclusive option that provides Psycheceutical an opportunity to acquire a majority equity stake in Vici Health Sciences. The total exercise price under the option would be approximately $10.5 million, which would be paid part in cash and part in equity. Read more here.

N2 Packaging Systems LLC

N2 Packaging Systems LLC, a sustainable packaging company which uses engineering and proprietary packaging technologies to protect and preserve CBD and cannabis products, today announced 44.5% year-over-year growth in the first half of 2022. N2’s growth was driven by 16 new business accounts across the United States and around the world, including Israel and Jamaica. Read more here.

The National Association of Cannabis Businesses

The National Association of Cannabis Businesses (NACB), a cannabis industry self-regulatory organization (SRO), has announced that it will convert from a for-profit corporation to a not-for- profit organization later this year. Originally launched in June 2017, as a for-profit corporation, the mission of the NACB has been to support the compliance, transparency, and growth of cannabis businesses in the U.S. Read more here.

International Brotherhood of Teamsters

Teamsters Joint Council 25 and the International Brotherhood of Teamsters announced today that they have entered into a joint agreement that will give Teamsters Local 777 exclusive jurisdiction for organizing cannabis workers in the state of Illinois. The agreement is a huge step forward towards the union’s efforts to organize the rapidly expanding industry. Read more here.


Metrc, a provider of cannabis regulatory systems in the U.S., announced a new contract with the State of Alabama to support the regulation of its medical cannabis market. This marks Metrc’s 23rd government contract to date and sixth so far in 2022. Read more here.

Debra BorchardtAugust 16, 2022


Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF) announced its unaudited financial results for the second quarter ended June 30, 2022, with revenue increasing 12% to $224 million versus the same time period in 2021. This was slightly higher than the Yahoo Finance average analyst estimate for Verano revenues of C$280 million, which when roughly converted to today’s exchange is $217 million and higher than the first quarter’s revenues of $202 million. The company also trimmed its net losses to $10 million from last year’s net loss of $30 million.

“I am very proud of our performance this quarter alongside the strategic investments we made to ensure our high operational standards touch every part of our business,” said George Archos, Verano Founder, and Chief Executive Officer. “Despite ongoing macroeconomic headwinds, we achieved a number of wins throughout the quarter, including the successful launch of adult-use sales in New Jersey, exceeding a milestone of operating more than 100 dispensaries following the opening of seven new stores in Florida, West Virginia and Pennsylvania, announced a partnership with Mission Green to advance cannabis clemency and social equity initiatives, and launched mobile applications and rewards programs for our flagship Zen Leaf and MÜV dispensaries. I am proud of what we have accomplished since going public last year and remain confident that the strategy and plans we have in place will drive long term, sustainable growth for Verano.”

Verano noted that it has surpassed the 50-store mark in the state of Florida. It has also started sales in the new market of New Jersey with locations in Elizabeth and Lawrence Townships. Following the close of the quarter, Verano maximized its New Jersey footprint with the start of adult-use sales at Zen Leaf Neptune on the Jersey Shore.

Also after the quarter closed Verano said it launched its signature flower branded products in four new core markets – Arizona, Florida, Massachusetts, and Pennsylvania. The company also announced the upcoming launch of Savvy in September 2022, a new brand featuring larger-format cannabis products that cater to more value-oriented patients and consumers, across seven core markets.

As of June 30, 2022, Verano said its current assets were $288 million, including cash and cash equivalents of $93 million. The company said it  had working capital (deficit) of $(299) million and total debt, net of issuance costs, of $403 million.

In July, Verano told investors that it would have to restate its earnings due to accounting errors that were uncovered. The company’s Audit Committee determined that its tax expense for the first quarter 2022 report was overstated due to a clerical error in the effective tax rate calculation, and accordingly, the company’s tax obligation will be reduced.

Debra BorchardtJuly 28, 2022


Get ready for some cannabis companies to report boosted earnings as revenues got juiced from New Jersey adult-use sales. Cantor Fitzgerald analyst Pablo Zuanic thinks that the addition of this market could drive growth in second-quarter sales for several companies in a report he issued on Thursday. While there hasn’t been any official data from New Jersey on the number of sales, which began April 21, Zuanic thinks it could be as high as $60 million in the second quarter. 

The first month was reported to be $24 million and since that time the store count has grown from 12 to 17. The SKUs at the stores have jumped from  283 to 1,322 as more products get added. Looking at the landscape the companies poised to benefit the most are TerrAscend (OTC: TRSSF) with three dispensaries in NJ selling recreational cannabis as does Ayr Wellness (OTC: AYRWF). Next with two stores under their belts are Verano (OTC: VRNOF), Acreage Holdings (OTC: ACRHF), Columbia Care (OTC: CCHWF), Curaleaf (CURLF), and  Green Thumb Industries (OTC: GTBIF). Ascend Wellness (OTC: AAWH) taps in at one store, but its Montclair dispensary was been approved to start rec sales, however, Montclair won’t allow recreational sales. 

Apothocarium stores are owned by TerrAscend

Brick & Mortar Wins

In order to make his sales estimates, the analyst calculated the number of days during the second quarter that these companies could open their stores for business. Then he looked at the hours the stores were open and the market share that the operators had. He reviewed the online menus to determine SKU counts for the stores and further drilled down to in-store brands.

“If we define market share based on opening hours (prorated for when stores began rec sales), in 2Q22 Green Thumb and Verano would have had 19% share, TerrAscend 18%, Acreage 15%, Curaleaf 11% (its second rec store opened 5/24), Ascend Wellness 8%, Columbia Care 6% (extended rec opening hours from early June), and AYR 5% (its stores opened for rec on 6/14),” wrote the analyst. “If we define it based on SKU count, Green Thumb would have had 24%, Verano 23%, Ascend 17%, TerrAscend 11%, Curaleaf 9%, Columbia Care 3%, and AYR 2%.”

However, the geography and cannabis market in the state splits into three zones – North, Central, and South.  He wrote in his report, “There are more stores in the northeastern part of NJ while the Curaleaf store in Bellmawr initially had minimal competition and benefited from incoming Philly traffic. We should also factor in location (next to a high-traffic road/ highway) and parking availability. Although this report is not a 2Q preview, we would estimate that Green Thumb and Verano had ~18% share in 2Q; Curaleaf, Acreage, and Ascend 15%; TerrAscend (parking is an issue) 10%; and Columbia Care and AYR the rest (9% combined).”

The analyst then got out his calculator and wrote, “On the base of 1Q22 reported sales (all else equal; again, we are not forecasting total 2Q sales here), this would mean +4.4% for Green Thumb (18% x $60Mn, on a 1Q22 sales base of $242.6Mn); Verano +5.3% ($10.8Mn/$202.2Mn); Acreage +15.8% ($9Mn/$56.9Mn); Curaleaf +2.9% ($9Mn/$313.4Mn); Ascend +10.6% ($9Mn/ $85.1Mn); TerrAscend +12.1% ($6Mn on $49.7Mn); AYR +2.4% ($2.7Mn/$111.2Mn), Columbia Care +2.2% ($2.7Mn/$123.1Mn).”

Brand Power

The analyst went a little further and found that the top five brands in the adult use market accounted for 80% of the total SKUs available. Verano was the winner here with 376 SKUs or 28% of the market share. It was followed by Curaleaf with 321 SKUs and a 24% share, then TerrAscend’s Kind Tree brand came in at 215 SKUs and 16% share. Green Thumb’s Rhythm brand had 6%, and Ascend Wellness’s Ozone brand had 5%.

Vapes had the most SKU’s with Verano leading the pack, while flower came in second  and Curaleaf led that category. Curaleaf led the day for pre-rolls, while Verano mopped up with the edible category. 

In Closing

Most cannabis companies have been complaining about how challenging the cannabis industry has become. Mature markets are flattening out in sales and costs are going up, while prices come down. Consumers are being hit with inflation pressures and there are recession worries on the horizon. The addition of a new market and one that is looking to be a strong one is great news for these companies. Welcome to the Garden State.

Debra BorchardtMay 25, 2022


Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF) announced its financial results for the first quarter ending March 31, 2022 with revenue increasing 67% to $202 million versus last year. Revenue for Verano fell  from the fourth quarter’s $211 million. The net loss in the first quarter 2022 was $7 million, compared to a loss of $2 million in the first quarter 2021.

George Archos, Verano Founder and Chief Executive Officer said, “We remain focused on execution, evidenced by our continued retail footprint expansion, where we added seven locations in the first quarter, including our first Zen Leaf dispensary in West Virginia. Further, the April launch of adult-use sales in New Jersey generated significant and immediate growth in the state, which is representative of similar opportunities we are poised to capitalize on in future transitioning markets in our portfolio. This summer, we are excited to add Zen Leaf Neptune as an additional adult-use dispensary in a prime Jersey Shore location, and throughout the course of 2022, we will continue to invest back in our business through a number of cultivation construction and expansion projects.”

New Jersey Sales

Verano was excited to note that New Jersey Governor Phil Murphy was at Zen Leaf Elizabeth to celebrate the start of adult-use sales in the state on April 21, 2022. Adult-use sales got underway at the company’s Zen Leaf Lawrence Township location, also on April 21, 2022, with adult-use sales at Verano’s Zen Leaf Neptune Township location expected to begin in summer 2022.

SG&A was $80 million or 40% of revenue, compared to $37 million or 30% of revenue in the first quarter 2021; excluding depreciation, amortization and M&A earnouts, SG&A was 27% of revenue, up 2% from Q4 2021 on a comparable basis.

As  of March, Verano said it has cash & cash equivalents of $140 million. The company also said it drew an additional $100 million under its senior secured credit agreement, with an added option to request funding of up to $175 million.

StaffMay 11, 2022


Goodness Growth Holdings, Inc. (CSE: GDNS) (OTCQX: GDNSF) reported financial results for its first quarter ended March 31, 2022. Goodness Growth had total revenue in the first quarter of $15.6 million, an increase of 18.2% as compared to the same time period in 2021. The net loss in the quarter was $14.6 million versus a net loss of $6.9 million in the first quarter of 2021. The variance compared to the prior year was driven by the write-down of Arizona inventory to realizable value, the impairment of long-lived assets, and increased interest expenses.

“Our first-quarter results reflected continued growth across all of our markets besides Arizona, where we have been working through the loss of biomass related to weather impacts we’ve discussed previously,” said Chairman and Chief Executive Officer, Kyle Kingsley, M.D. “The recent launch of flower sales in Minnesota’s medical market is going exceptionally well for our Green Goods retail stores in the state, and we also expect the recent transition to adult-use sales in New Mexico to contribute to stronger sales growth throughout the remainder of this year. Our business will continue to benefit from these recent regulatory transitions in our markets, and we also believe it’s possible that adult-use sales could begin in New York sometime during the second half of 2022.”

Excluding contributions from Ohio and Arizona retail, total revenue increased 34.5% and reflected growth in each of the company’s other markets. Retail revenue excluding Arizona increased 40.3% to $12.4 million in Q1 2022. Wholesale revenue, excluding Ohio increased by 17.3% to $3.2 million, reflecting strong growth in MarylandNew York, and Minnesota, partially offset by a decline in the Arizona market.

Verano Updates

In February, the company announced that it agreed to be acquired by Verano Holdings Corp. in a deal valued at approximately $413 million on a fully-diluted basis.

Kingsley continued, “First quarter results were also impacted by an inventory adjustment in Arizona and impairments of long-lived assets in Arizona and Maryland. Given our pending transaction with Verano Holdings Corp. and the license overlaps in these markets, we’ve revised our operating plans. We recently wound down operations at the outdoor farm in Amado, Arizona, and will no longer pursue the phase two expansion in Massey, Maryland. We are continuing to focus on our expansion in New York, and expect the pending transaction with Verano to close sometime during the fourth quarter.”

StaffApril 27, 2022


Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF) announced its 2021 financial results with fourth-quarter 2021 revenue of $211 million and a net income of $27 million, or 19% of revenue. this was also Verano‘s first quarter to implement U.S. accounting standards called GAAP and audited in accordance with U.S. PCAOB.

For the full year of 2021, revenue increased by 223% to $738 million versus 2020. the company said that on a proforma basis, revenue increased to $760 million, up by 233% compared to 2020. The net loss for the year was $15 million, compared to a net income of $38 million in 2020, driven primarily from depreciation and amortization of acquisitions and expansion capex.

“2021 was a transformational year for Verano, our first as a public company. I am very proud of what we accomplished and remain confident in our ability to build upon this strong foundation to achieve long-term, sustainable growth,” said George Archos, Verano Founder and Chief Executive Officer. “Growth across all our key financial metrics was driven organically, from our core operations and by accretive acquisitions we made throughout the year. We have always focused on driving profitability, which we believe sets us apart in the industry. I was pleased to report results in line with guidance by maintaining our signature, industry-leading margin profile for 2021.”

Verano now has active operations spanning 13 states, consisting of 96 dispensaries and 13 cultivation and processing facilities, with more than one million square feet of cultivation capacity. The company has also entered into a deal to buy Goodness Growth Holdings in order to establish a strong foundation in the attractive markets of New York, Minnesota, and New Mexico upon closing the proposed transaction.

Mr. Archos added, “We significantly increased our national retail and cultivation footprint in 2021 and to date in 2022, with current operations in 13 states, including 96 retail stores and a cultivation footprint exceeding one million square feet. In addition to our expanded operations in Pennsylvania, Nevada and Florida – all of which rank within the top 10 largest cannabis markets in the nation – our Connecticut acquisitions exemplify one of Verano’s core strategies of entering markets that are primed for adult-use transition, allowing us to capture imminent growth. This strategy came to life most recently in New Jersey, where we welcomed Governor Phil Murphy at our Zen Leaf Elizabeth dispensary last week to mark the historic launch of adult-use sales in the Garden State, a day for which we were preparing for nearly a year. We built our operations in New Jersey with legalization of adult-use sales in mind, and we have more than adequate supply to support ongoing strong demand that continues to surpass expectations. Finally, upon closing, our transformational acquisition of Goodness Growth will strengthen Verano’s position as one of the country’s top multi-state operators by footprint in key markets, including New York and Minnesota, while positioning the Company to continue delivering industry leading profitability.”

As of December 31, 2021, Verano said its current assets were $274 million, including cash and cash equivalents of $99 million. The company had working capital of ($196) million and total debt, not including lease liabilities and net of issuance costs, of $290 million.

Debra BorchardtMarch 11, 2022


Goodness Growth Holdings, Inc. (CSE: GDNS)(OTCQX: GDNSF) reported financial results for its fourth quarter and full-year ending December 31, 2021. Total revenue in the fourth quarter was $13.7 million, an increase of 10.5% versus the same time period in 2020. Excluding contributions from PennsylvaniaOhio, and Arizona retail, total revenue increased 23.8%. Retail revenue excluding Arizona and Pennsylvania increased 33.8 percent to $10.8 million in Q4 2021 and reflected growth in each of the Company’s other retail markets. Wholesale revenue, excluding Pennsylvania and Ohio, declined by 5.6% to $2.2 million, with the decline primarily driven by the continued impact of crop loss in Arizona which occurred during the third quarter, partially offset by growth in New York and Maryland.

Goodness Growth also reported a net loss in the quarter of $12.7 million, versus a loss of $2.3 million in 2020 for the same time period. The company attributed the increase to higher production costs, operating, and other expenses, offset partially by the gain on the disposition of the company’s former dispensary in Arizona during the quarter.

“Our fourth-quarter results reflected continued growth across most of our markets, but we continued to experience the negative impact of crop loss in Arizona we’ve previously discussed which occurred during the third quarter,” said Chairman and Chief Executive Officer, Kyle Kingsley, M.D. “Wholesale sales in Arizona increased sequentially as compared to Q3, but the loss of biomass continued to impact gross margin performance. Revenue increased across the rest of our operating markets in Q4, and we’re looking forward to contributions from flower sales beginning in Minnesota in Q1 and adult-use sales in New Mexico in Q2.”

2021 Full Year Results

Goodness Growth reported total revenues increased by 10.6% over last year to $54.4 million, including the company’s former subsidiaries in Pennsylvania and Ohio, and its former dispensary in Arizona. Excluding contributions from PennsylvaniaOhio, and Arizona retail, full-year revenue increased 30.8%. Retail revenue excluding Arizona and Pennsylvania increased 33.3% to $39.6 million in 2021 and reflected growth in each of the company’s retail markets. Wholesale revenue, excluding Pennsylvania and Ohio, increased by 21.3% to $9.7 million. The net loss in 2021 was $33.7 million, compared to a loss of $22.9 million in the fiscal year 2020. The variance compared to the prior year was driven by increased operating and other expenses and higher interest expenses, as well as the non-recurrence of the gain on disposition of assets in the prior year.

Total operating expenses were $40.3 million, or roughly flat compared to $40.2 million in the fiscal year 2020. Increases in salaries and wages, professional fees, general and administrative expenses, and amortization and depreciation expenses were offset by a reduction in share-based compensation as compared to the prior year. The increase in salaries and wages, and general and administrative expenses were driven by significant operational buildout across the Company’s various operating markets, and the reduction in share-based compensation was driven by the non-recurrence of warrant vesting which occurred in the fiscal year 2020.

“Smokeable flower sales began in Minnesota’s medical market on March 1, and early indications suggest Minnesota flower sales will be our strongest driver of revenue growth until adult-use sales commence in the State of New York. We continue to focus on the development of our new dispensaries in New York, as well as the construction of our new indoor cultivation facility, and expect these activities to continue through the closing of the previously-announced, pending transaction to be acquired by Verano Holdings Corp. Finally, given this pending transaction, we no longer intend to provide frequent updates of our future performance expectations, and as a result, are withdrawing our previous outlook at this time.”

On February 1, 2022, goodness Growth announced that it has entered into a deal to be acquired by Verano Holdings Corp. in an all-share transaction valued at the time of announcement of approximately $413 million on a fully-diluted basis.

Debra BorchardtMarch 4, 2022


This story was republished from Crain Chicago.

Overcoming a legal hurdle facing most landlords, Verano Holdings is poised to become the first major cannabis company to rent office space in a top-tier building in Chicago.


One of Chicago’s publicly traded marijuana companies is close to leasing space for a new headquarters in River North, a potential breakthrough for cannabis firms that have struggled to find landlords willing or able to sign them to office deals.

Verano Holdings (OTC: VRNOF) is in advanced talks to sublease roughly 24,000 square feet at 515 N. State St., according to multiple people familiar with the negotiations. The deal would mark an expansion and relocation from its current headquarters in the vintage loft office building at 415 N. Dearborn St.

Sources familiar with the company’s search said Verano is considering two different sublease offerings in the building: One in the lower portion of the property leased to restaurant software company Toast and another higher in the building leased to marketing communications firm Dentsu Aegis Network. Both spaces have been listed as available for sublease throughout much of the COVID-19 pandemic.

If Verano completes a deal with either, it would become the first major cannabis company to lease office space in a top-tier building in Chicago. Such deals have been difficult to consummate because marijuana remains illegal at the federal level, even though it is now legal under Illinois law. That has prevented many building owners from getting approval for cannabis company leases from their lenders, particularly large, institutional banks wary of running afoul of federal rules.

But Verano is spotlighting a solution through the sublease market, since its agreement would be exclusively with another tenant in the building and not the building owner itself. Landlords typically must consent to sublease agreements in their buildings, and sources familiar with the negotiations said 515 N. State owner Beacon Capital Partners would not block a Verano sublease agreement.

A spokeswoman for Beacon declined to comment, and spokesmen for Verano, Dentsu and Toast did not provide comments.

The sublease could open the door for other cannabis companies in a market that is home to the emerging titans of the weed industry. Verano, Green Thumb Industries, and Cresco Labs are three of the five biggest public companies in the United States that grow and sell marijuana. One of the largest privately held players in the space, PharmaCann, is also based here.

Verano has roughly tripled headcount at its main office to about 120 since it went public a year ago, according to a company source, prompting the need for more office space. The State Street office would be more than double the size of the company’s current spot on Dearborn.

Downtown office landlords would love to see more companies from the expanding cannabis sector lease up available office space, even if it’s on the sublease market. Office vacancy in the central business district hit an all-time high last year, partly driven by a flurry of sublease listings from companies trying to shrink their footprint after adapting to the rise of remote work during the public health crisis. There was 83% more downtown office space available for sublease last month than there was when the pandemic began, according to data from brokerage CBRE.

Cannabis companies could help occupy some of that, taking out some formidable competition landlords are grappling with today. In the meantime, building owners are closely watching the federal SAFE Banking Act, a bill that would carve out the ability for banks to do business with cannabis companies. That measure was originally proposed in 2017 and has won approval from the House of Representatives as recently as last month, but it has not been able to move out of the Senate.

Boston-based Toast listed half of its State Street office for sublease in July 2020, just six months after it leased nearly 50,000 square feet in the building following its acquisition of another Chicago-based restaurant software company, StratEx. Publicly traded Toast disclosed early in the pandemic that it would cut 50% of its staff through layoffs and furloughs, freeze hiring and pull back job offers due to fallout from the pandemic.

Dentsu became the largest tenant in the 29-story building in 2019 when it more than doubled its footprint to 126,000 square feet, a move that consolidated multiple offices in Chicago under the umbrella of London-based Dentsu. The company subsequently listed more than 40,000 square feet on the sublease market during the pandemic, though it’s unclear what prompted the offering.

The Dentsu and Toast deals were part of a crucial leasing bounce-back at the State Street building for Beacon and co-owner Ivanhoe Cambridge. Their venture saw a nearly 400,000-square-foot anchor tenant deal with embattled tech company Outcome Health crater after Outcome’s investors sued the company, alleging its leadership inflated results. But new deals inked with Dentsu, Toast and co-working provider WeWork helped shore up the building’s rent roll before the pandemic put a clamp on office demand.

The building today is 71% leased, according to real estate information company CoStar Group. That’s below the 80% average for downtown office buildings at the end of 2021, CBRE data shows.

Crain’s reporter John Pletz contributed.

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