TORONTO, May 04, 2020 (GLOBE NEWSWIRE) -- PRESS RELEASE -- Aleafia Health Inc.’s wholly owned subsidiary Emblem Cannabis Corp. has secured a Health Canada License Amendment for its Paris facility’s 30,000-square-foot Phase II expansion, entirely dedicated to the extraction, production, packaging and distribution of finished cannabis products.

“The Phase II expansion, our crown jewel, permits an exponential increase in our ability to produce and sell high-margin cannabis health and wellness products in the medical, adult-use and international markets,” said Aleafia Health CEO Geoffrey Benic. “The Paris facility’s state-of-the-art expansion, purpose built to meet EU-GMP standards, creates a unique competitive advantage with significant barriers to entry. Coupled with our ultra-low-cost outdoor cultivation, it sets us apart in the cannabis industry. This means greater breadth of formats, greater scale and automation, and ultimately higher margins as we utilize cannabis grown outdoors through our integrated production ecosystem.

“This breakthrough also accelerates our Cannabis 2.0 strategy and will allow us to produce new differentiated product formats. We have been preparing for months and have ordered equipment, completed formulations and have built up a large inventory of cannabis extracts to be used as input material for new formats for immediate use in the new facility. Now it’s time for execution.”

The Paris facility license amendment, granted on May 1, 2020, authorizes cannabis production in the entire expanded building. The company expects to commence production and packaging operations at the Phase II expansion in the next two weeks.

Production Ecosystem

The expansion will allow the company to process and package all flower cultivated at its Port Perry outdoor cultivation site and its Niagara Facility. The expanded production facility increases the company’s licensed extraction, packaging and processing area from 2,500 sq. ft. to 20,000 sq. ft. It features multiple automated packaging lines and rooms dedicated to the production of new product formats, along with in-house quality control analytical testing and R&D.

The expansion is purpose-built to meet European Union Good Manufacturing Practices (EU-GMP), which represents the highest standard of pharmaceutical-grade production in the world, and as a result provides the greatest possible access to global markets. Members of Aleafia Health’s senior management have previously led the build-out, certification and operation of multiple EU-GMP pharmaceutical production facilities.

The Illinois Department of Financial and Professional Regulation announced May 4 that adult-use cannabis sales surpassed $37 million in April, according to a press release.

The state’s dispensaries sold 818,954 items for total sales of $37,260,497.89.

Illinois residents purchased $29,735,650.41 worth of cannabis, while out-of-state visitors spent $7,524,847 on cannabis products.

The sales figures do not include taxes collected, according to the press release.

Gov. J.B. Pritzker deemed medical and adult-use cannabis dispensaries as essential businesses in his March 20 executive order in response to the COVID-19 pandemic.

“Our top priority is to ensure consumers are safe when they go to a dispensary to purchase cannabis,” Toi Hutchinson, Senior Advisor for Cannabis Control to Gov. Pritzker, said in a public statement. “The steps we’ve taken to increase social distancing at dispensaries are accomplishing that, while also enabling this new industry to continue to grow. As such, curbside pickup will remain an option for medical cannabis users to obtain the product they need through May 30."

California-based MedMen has temporarily closed the majority of its Florida dispensary locations for undisclosed reasons, according to a Florida Politics report.

The company shuttered five of the its eight retail locations in the state as of May 3, the news outlet reported, including the dispensaries in Jacksonville Beach, Key West, Orlando, Sarasota and Tallahassee.

MedMen’s dispensaries in Pensacola, St. Petersburg and West Palm Beach are still open, Florida Politics reported.

“MedMen Sarasota is temporarily closed effective Sunday May 3rd. Thank you for your patience and support, please check back for updates on MedMen.com,” a closure notice on the company’s website says.

MedMen plans to open six additional dispensary locations throughout the state in Deerfield Beach, Fort Lauderdale, downtown and Southside Jacksonville, Miami Beach, and Orlando, according to its website.

Editor's Note: This story was updated at 4:45 p.m. ET on Tuesday, May 5 to reflect comments from 4Front Ventures Founder and President Kris Krane.

Ethos Cannabis, a Pennsylvania-based multistate cannabis operator with operations and investment interests in Massachusetts, Florida and Arizona, announced May 5 that it has signed definitive agreements to acquire the rights to 4Front Ventures’ dispensary locations in Pennsylvania and Maryland, which currently operate under the Mission brand.

Under the agreements, Ethos is acquiring the rights to one operational dispensary in Allentown, Pa., and management agreements for four operational dispensaries in Rockville, Glenmont, Catonsville and Hampden, Md. The dispensary license in Pennsylvania also allows the company to open two additional dispensary locations in the state, and all storefronts will be rebranded from Mission to Ethos.

RELATED: Mission Creates Consistency Across Multiple Dispensary Locations

The acquisition furthers Ethos’ goal of developing a strong presence in the Mid-Atlantic, East Coast and Midwest cannabis markets, according to President and CFO David Clapper.

“One of our main focuses is here in the Mid-Atlantic region, here in the Northeast,” Clapper told Cannabis Business Times. “We’re already located in Philadelphia [and] we already have a vertically integrated permit here in Pennsylvania. … The ability to open additional dispensaries right here in Pennsylvania is really strategic for us. … That’s what really attracted us to the acquisition.”

RELATED: Ethos Cannabis Embraces Pennsylvania’s Expanded Caregiver Program to Maintain Retail Connection with Patients During COVID-19 Pandemic

For 4Front Ventures Founder and President Kris Krane, the deal represents the company's focus on its core markets and achieving profitability.

"Maryland and Pennsylvania, unfortunately, didn’t fit into those core markets at a time when capital is challenging to raise in general," Krane told Cannabis Business Times. "We’ve got some projects with some fairly large capital requirements, and when we were looking at the best use of proceeds and where our core markets are, we decided this was a really big deal, particularly being an all-cash deal, and those resources could be best spent for us right now in other parts of the country."

4Front is turning its attention to its operations in Massachusetts, Illinois, California, Washington and Michigan, markets where the company is or can be vertically integrated and where there is a clear path to serve an adult-use customer base.

"Unfortunately, Maryland and Pennsylvania, neither of those met that criteria, so they were ones we were willing to part with in order to streamline our operations," Krane said.

For Ethos, Pennsylvania and Maryland are attractive markets due to their limited license structure, as well as their robust medical cannabis programs, which Clapper said boast a growing number of patients and strong product offerings.

The acquisition marks Ethos' entry into Maryland’s market and gives the company the maximum number of retail locations that it can operate under current state regulations. The company will initially operate the Maryland dispensaries through management arrangements and will acquire full ownership after certain regulatory hold periods expire.

Ethos has focused its expansion plans on developing a strong presence in the markets in which it currently operates, rather than setting up shop in additional states, he added.

“We’re less concerned with going out and trying to reach into a lot of states and say we have a presence in a lot of states,” Clapper said. “We’re more interested in going deep in the states … we’re in.”

With a strong presence in Pennsylvania and Maryland already underway, Ethos now plans to integrate its team with the 4Front team and convert the Mission dispensaries to the Ethos brand.

The company has also received its cultivation and processing license as a clinical registrant in Pennsylvania’s medical cannabis research program in partnership with Sidney Kimmel Medical College at Thomas Jefferson University.

“We’ve started growing just as of last week, so … we’ve started operations in every area—growing, processing and dispensing—and now it’s just increasing the size of our operations here in the state.”

Ethos is also working to open four retail locations in Massachusetts, as well as a cultivation and processing facility, which will open as soon as they receive final regulatory approvals.

“For us, it’s really focusing on operational execution now—getting our dispensaries open, increasing our revenue, increasing our EBITDA, and then … looking at additional strategic acquisitions if available, or even additional licensing,” Clapper said. “One of the real goals and focuses of our company at the moment is to really begin full operations."