A Salisbury medical cannabis dispensary known for its focus on holistic health is joining forces with another Maryland dispensary to bring its brand to the D.C. suburbs.
Regulators with the Maryland Medical Cannabis Commission approved a deal Thursday for a newly formed company called Derby1 LLC to purchase Peninsula Alternative Health for an undisclosed price.
Peninsula Alternative Health CEO Anthony Darby told the BBJ that the group behind Derby1 LLC also manages the Divine Medicine dispensary in Montgomery County. Dispensary management documents filed with state regulators last year show Dharini Patel is the CEO of Divine Medicine. Patel is also the registered agent for Derby1 LLC, which was formed in November and lists an address in Clarksburg.
Divine Medicine will rebrand as Peninsula Alternative Health, Darby said, and he will remain CEO. He described Divine Medicine as a company owned by a "family with local ties" and said he does not personally have an ownership stake in the new venture.
For Darby, the sale is the culmination of years of “bootstrapping” for Peninsula Alternative Health and provides an exit for two of the original owners. Darby said there were four owners initially, each with 25%. Darby said he did not have an ownership stake, though his ex-wife did.
“This was a way to take care of them and also put us in a position to grow,” Darby said. "For us to compete long-term, we just felt we needed more access to capital than we had as a team.”
While some dispensaries have sought outside funders or turned to large, out-of-state cannabis firms, Peninsula Alternative Health took a decidedly independent route. When the dispensary first submitted its application years ago, Darby said they did it themselves with about $5,000. He said they raised $188,000 to open the original 2,000-square-foot dispensary, with $50,000 of that going straight to the Maryland Medical Cannabis Commission. The dispensary later moved into an 8,800-square-foot space.
“We did it on just razor-thin margins and just tons of sweat equity. I believe this is the evolution of our business,” Darby said of the sale.
In an interview with the BBJ in late December, Darby said it will only get more difficult for independent cannabis businesses to compete in Maryland.
“There’s going to be a lot of consolidation next year,” Darby predicted then. “One concern is that we’re going to see the presence of more multi-state operators come in. That creates many challenges for independents who don’t have a strong business plan.”
Though Peninsula Alternative Health is now part of that consolidation, Darby said Thursday it was important to find a buyer who believed in the dispensary’s culture and mission and could provide more capital. Peninsula Alternative Health focuses heavily on wellness and will continue that approach even if Maryland legalizes adult-use recreational cannabis, Darby said.
He wants to bring that philosophy to the Washington, D.C. area, which is a much more competitive market for dispensaries than Salisbury.
“It’s much different but we’re excited to prove that a patient-centric model will work,” Darby said.
Darby said he was taking measurements last week for new signs at Divine Medicine. He expects the rebrand will be finished by early spring.
Maryland employees
| Rank | Prior Rank | Company name/website |
|---|---|---|
1 | 1 | Zen Leaf |
2 | 2 | Columbia Care |
3 | 3 | Health for Life |