Acquisition to Transform Item 9 into Largest Global Cannabis Franchisor
Cannabis dispensary franchisor Item 9 Labs Corp. announced Wednesday that it will acquire Sessions Cannabis, which is one of Canada’s largest cannabis retail franchisors. Phoenix-based Item 9 Labs is known for its overall experience in the cannabis industry, which extends to retail sales, cultivation capabilities and product diversity.
Item 9 Labs Corp. CEO Andrew Bowden called the purchase “a transformative acquisition that fast-tracks our entry into the Canadian market and brings tremendous value to our shareholders. … This acquisition would transition us from being a multistate operator to an international cannabis company and the largest global cannabis franchisor.” Bowden said Item 9 Labs has aggressive growth plans for Canada – with “much deeper market penetration, both in Ontario and other provinces” – including store openings within this calendar year.
About Sessions Cannabis
Founded in 2019, Ontario-based Sessions has 43 stores within that province. Most of those stores are located in major retail shopping centers with big-name anchor tenants such as Costco, Walmart, well-known grocers and quick-service restaurants, according to a news release from Item 9 Labs Corp. Sessions has 18 franchisees, most of them multi-unit owners.
Known for selling safe, Health Canada-regulated cannabis, Sessions was an early brick-and-mortar cannabis retailer in Ontario. The company’s stated mission is to offer an inviting, educational customer experience.
Canada Market Stats
Canada recorded $3.9 billion (in Canadian dollars) in cannabis sales last year, a 50% increase over 2020 sales, according to the federal data agency Statistics Canada. Ontario, which recorded $1.47 billion in cannabis sales in 2021, is Canada’s largest cannabis market.
Steven Fry, Sessions Cannabis CEO and co-founder, said that his company’s locations that have been open for more than a year see an average annual revenue of $2.46 million (Canadian dollars). “We have amazing multi-unit franchisees and a solid franchise system that is dedicated to their success. To further innovate within the industry and expand our reach, we need the right partner. We believe we have found that with Item 9 Labs Corp. and their franchise brand, Unity Rd.“
Mike Weinberger, Item 9 Labs chief finance officer, agrees that the companies’ synergy is ideal. “This is a huge opportunity for Item 9 Labs Corp. and further solidifies our mark as leaders in cannabis franchising,” Weinberger said.
Other Item 9 Labs Acquisitions
Item 9 Labs Corp. acquired ONE Cannabis Group in March 2021, the parent company of the cannabis retail dispensary franchise Unity Rd. That acquisition made Item 9 Labs the first vertically integrated cannabis dispensary franchisor in the United States. The combination of the Unity Rd. franchise system — which already has more than 20 partners developing more than three dozen stores in 10-plus states — with Sessions Cannabis makes Item 9 Labs Corp. the biggest publicly traded cannabis franchise company, the Item 9 Labs release said.
Item 9 Labs Corp. has been actively expanding. It recently acquired a dispensary license and storefront in North Denver and signed an asset purchase agreement for a medicinal and recreational dispensary and cultivator, The Herbal Cure, in Denver, Colorado is among the top markets where Item 9 Labs Corp. is working to acquire cannabis dispensaries.
Item 9 Labs works to aid new and established dispensary owners as they navigate the complex cannabis industry regulations and compliance. Item 9 Labs is expanding its operations space by up to 640,000-plus square feet on its 50-acre site, one of the largest properties in Arizona zoned for growing and cultivating cannabis.