Crop Circles

Phoenix dispensary expands its potential with a big new merger

Arizona's pot circle is getting smaller and smaller, but with bigger blunts all around. In the past month, a couple companies have been consolidating their marijuana businesses and snipping off larger buds for themselves.

Harvest dispensary in Phoenix recently merged with cultivation company Modern Flower, bringing six new dispensaries under its ownership in addition to an 18,000-square-foot grow in Cottonwood.

The blend will land Harvest with a total of eight dispensaries and seven growing facilities across the state, making it the biggest player on the field. Harvest currently operates two stores in Tempe and Scottsdale, but plans on bringing the shop to Tucson eventually.

With 98 dispensaries currently operating in the state, eight is no small chunk. But the Phoenix New Times says all that cash will make its way back into patients' pockets.

As Harvest takes over more grows and more dispensaries, they'll have more control over the price. But don't let that scare you. They're not going to ratchet it up to a point where nobody can afford to buy anymore.

Instead, that means the price will probably come down, and not just at their stores. With more control over more plants, Harvest will be able to grow more marijuana than if the same amount of plants were grown by separate companies.

Harvest also brings down the price with some pretty cool tech like an autonomous greenhouse at their 35,000-square-foot facility in Camp Verde. Sensors keep tabs on the environment and keep the place in perfect conditions for the best bud.

All this amounts to more marijuana in the market. With an increase in the supply comes a decrease in the price. At least, so long as the demand remains constant. But in the past year alone, Arizona has added more than 30,000 patients to the program. That's about a 30 percent increase.

That means growers will have to keep up, then exceed the same growth if they want to bring down the price.

But Harvest might be up for the challenge. They plan on hiring about 100 new employees by the end of the year, nearly doubling their payroll. Anyone on Wall Street would call that a good bet.

Exactly who is at the top of the stalk is a whole 'nother story. Arizona's 2010 medical marijuana law set up the industry to be nonprofit, which means members of the nonprofit boards can remain anonymous under Arizona state law.

The state licenses nonprofit boards to operate dispensaries. One license means one dispensary. But those boards can transfer the heavy lifting to management companies, and there's no limit on how many dispensaries those companies can manage.

A couple of Canadian companies have even been snatching up those management companies leading to long, entangled bloodlines for Arizona's marijuana industry.

So long as the weed keeps growing and the stores keep selling, though, there's no need to worry. In fact, all this just makes the marijuana biz look more and more like a legitimate industry, no matter what the feds have to say about it.

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