The president of GB Sciences Louisiana has reassured patients that medical marijuana production will not be affected by a change of ownership.
The company is one of just two producers handed a license to cultivate medical cannabis in Louisiana and the first to actually bring products to market. It grows marijuana at LSU in a partnership with the university, and the flower is then turned into products that can be distributed to pharmacies around the state.
GB Sciences Louisiana was previously a 50/50 joint venture between Las Vegas-based GB Sciences and Wellcanna Group, a company based in Lafayette. Wellcanna has now purchased GB Sciences’ 50% stake in a deal that could increase to $16 million, making it the sole owner of the company.
GB Sciences Louisiana president John Davis will remain in charge of the operation and he said the transaction has the support of LSU. “We believe this is a positive transaction,” said Davis.
GB Sciences will receive $7 million in cash at closing, $1 million in cash within 60 days of closing, and the remaining $8 million as an earn out. This earn out will depend on the profitability of GB Sciences Louisiana, which may now change its name.
The move will provide GB Sciences with an important cash injection as it bids to boost sales in Nevada, while the Louisiana company will set about an ambitious plan to increase its workforce from 20 to 200.
Pharmacies in Louisiana can only sell cannabis products grown and processed within the state. Smokable cannabis is banned, as are vaporizers.
It only permits cultivation at two sites: Louisiana State University and Southern University. Both universities had to team up with a commercial producer to commence the production process.
LSU chose GB Sciences Louisiana, while Southern went with Advanced Biomedics LLC. They broke ties following a dispute, and it then teamed up with Ilera Holistic Healthcare. Cultivation began at the end of July, but the first products are not quite ready yet, leaving GB Sciences Louisiana as the sole supplier in the state right now.