Nova Farms Expands into Connecticut with $20M Investment
Massachusetts-Based Cannabis Company Nova Farms Secures $20 Million Investment, Eyes Expansion in Connecticut and New Jersey.
On the heels of a $20 million private equity investment, a vertically integrated multistate cannabis operator is preparing to launch in Connecticut after building business roots in a neighboring state.
Nova Farms, a Massachusetts-based cannabis company with a network of marijuana dispensaries and outdoor cultivation farms in three states, announced in May that it secured a $20 million investment from alternative investment firm Chicago Atlantic. With the new infusion of money, Nova Farms CEO Derek Ross said the company plans to expand its existing footprint in New Jersey, and establish a presence in the Nutmeg State.
“Historically, raising money in cannabis was a lot easier than it is now,” Ross said. “Banks are really honing in on what it takes to run this business — it’s not a get-rich-quick business that people thought it was.”
Northeast expansion
Ross opened Nova Farms in 2016, and the company has since grown to about 400 employees spread across an outdoor cultivation farm and three dispensaries in Massachusetts; a farm and dispensary in Maine; and another farm and retail storefront in New Jersey. The business sells its products through a variety of brands, such as Southie Adams and Sticky Fish, to name a few.
The company says its farm in Sheffield, Mass., is the largest outdoor cannabis cultivation operation in the Northeast, and Ross hopes to replicate that outdoor model’s success in Connecticut.
Ross is partnering with entrepreneur Jason Teal — who owns a restaurant in Hamden and operates a Meriden education nonprofit called Change The Play Inc. — for the company’s Connecticut expansion. The duo has a social equity cultivation license in the state, which also allows them to open a few retail storefronts. Plans for dispensaries in New Britain and Bridgeport are being finalized.
“I think build-out in New Britain will be done in September, and I think Bridgeport should be done towards the end of the year, or definitely by (the first quarter) of next year,” Ross said.
Still River is still searching for an outdoor farm location.
Chicago Atlantic recently identified Nova Farms as one of just a few cannabis businesses it was interested in investing in, Ross said. Chicago Atlantic was particularly attracted to the company’s Northeast growth plans.
“Nova Farms has demonstrated its ability to operate successfully and identify attractive opportunities to accelerate progress,” said Peter Sack, a partner at Chicago Atlantic, which has made over $2 billion in credit and equity investments. “We have every confidence in their plans to open additional locations across the Northeast, which will support their mission to increase safe and positive accessibility.”
While Connecticut and New Jersey expansions are the near-term focus, Ross said New York also presents growth opportunities. And the company is interested in potentially bringing on more equity investors for future expansions in the region.
“One of my mentors a couple years ago told me, ‘make sure you dig yourself deep, don’t spread yourself thin,’ and we’re going to keep that mentality,” Ross said. “We’re probably not going to go any further south than Maryland, if we get there. There’s 60 million people up here (in the Northeast), and this is the area we want to really focus on our consistency, our formulations, our practice and just get it perfect.”
