Cannabis cultivator Eaze to expand Florida operations after near-shutdown, plans new stores 

Cannabis cultivator Eaze to expand Florida operations after near-shutdown, plans new stores (Courtesy of the Jacksonville Business Journal) — One of Northeast Florida’s largest cannabis cultivators plans to invest more in the state in 2025 after almost shutting down operations and closing all of its stores.

And North Florida will benefit from this reinvestment.

After raising $10 million in Series B funding, Eaze Inc., which owns the Green Dragon brand, will continue operations in California, Colorado, Michigan and Florida, reversing an end of October 2024 decision to shut down cannabis cultivation and dispensary operations in the four states.

Because of this decision, the 400,000-square-foot Palatka cultivation facility will, instead of closing, add employees as it ramps up production. Eaze also plans to add three more retail stores in 2025 — in Yulee, Live Oak and Gainesville.

“We are well positioned and have now completed the expansion of our cultivation facility, which is the key to unlocking the next level of growth for us,” Eaze CEO Cory Azzalino told the Business Journal.

This follows a tumultuous six months for the firm.

In August, a group of investors led by Netscape founder James Clark foreclosed on Eaze Technologies Inc.’s assets when it was apparent the company would not be able to pay back $54 million in debt to the same group of investors.

Instead of shutting down operations, Clark’s group, which first invested in Eaze Technologies Inc. in 2017, decided to reorganize under the name Eaze Inc.

“Jim had invested quite a bit of money in the old company,” Azzalino said. “This was an opportunity to reset the capital structure, restructure the company and have it come out healthier.”

Part of the impetus behind the decision to shut down is because Chapter 11 bankruptcy is not available to cannabis firms because it is still illegal under federal law.

Investors in the firm will now apply a $10 million injection to recoup some loss in the company that was once valued at $700 million in 2021 by building back up from a $64 million injection at the end of 2024.

“Cannabis has not been a great investment for most investors,” Azzalino said. “If you look at any of the public companies, they’re down 90 to 95% pretty much across the board over the past four years. It’s just been a difficult sector, and the lack of movement on a federal basis is a big reason for that.”

This means cannabis remains restricted in the 26 U.S. states that have not legalized the product for recreational use.

Ironically, however, Florida is a growth state for Eaze in part, because Amendment 3 failed, which would have legalized recreational use here.

As a medical-only market, a Medical Marijuana Treatment Center license is required to sell cannabis in the state. And because the MMTC license requires vertical integration of cultivation, process, transport and dispensary of medical marijuana, it is an extremely limited market. Only 25 MMTC permits have been issued to date, according to the Office of Medical Marijuana Use.

“Amendment 3 failing hurt, but the medical market in the state is still a really robust market,” Azzalino said.

No other state allows a single license to operate across the entire supply chain like the Florida MMTC license does, and the Florida MMTC license allows holders to open as many facilities as it wants, including cultivation facilities, processing facilities and dispensing facilities.

At the moment, the Palatka location is Eaze’s only facility supplying cannabis across the state.

The $10 million investment upped its production capacity from 32,000 to 64,000 square feet, which will require up to 50 more employees added to the approximately 100 people already working there.

In total, Eaze uses about 150,000 of the 400,000 available square feet in the facility to produce and supply Green Dragon cannabis to over 40 stores in the state, Azzalino said.

“We still have lots of future expansion,” Azzalino said. “And we would have expanded much faster had Amendment 3 passed.”

Green Dragon’s approximately 40 Florida dispensaries place it near the top five dispensaries in the state, but that is still only about 60% of Curaleaf’s 63 dispensaries and 25% of Trulieve’s 160 locations (according to company websites).

Like most cannabis firms, Green Dragon manufactures flower, distillate/vape, gummies, prerolls, edibles and other various specialty cannabis products. In addition to “quick and reliable service” at its dispensaries, the Palatka facility is its key to product differentiation.

“100% of our products are grown indoors, and I think that that yields a certain level of quality,” Azzalino said. “There are things that you’re able to do with temperature controls and environmental controls that you’re just not able to do in places like greenhouses, so we have a very high level of quality.”

Aesthetics and potency determine price levels. On the high end of the price scale is hand-trimmed flower, which has longer dry and cure times versus more inexpensive flower trimmed with automated machinery. Larger nugs are also more expensive.

The price for Green Dragon product is still not as low as the company wants it to be. This will change as cultivation and production ramp up. Azzalino said there is opportunity for growth in these price levels, especially, in a more restrictive medical market.

“This really is medicine for people, and so you need to make sure that it’s of a pharmaceutical grade. Our facility is at the highest standard of cleanliness that we can make it,” Azzalino said.

Medical standards apply to patients as well.

“Patrons and consumers of cannabis can be discerning customers, especially medical patients,” Azzalino said. “They are opting into a program where it costs them money every year. They are reliant on a product for some sort of medical condition, so it’s important that we offer a range of products for those customers that care a lot about the quality.”

As Palatka Green Dragon production ramps up, Eaze will spend 2025 developing new market-specific product offerings, launching a refreshed brand marketing campaign and building new brand partnerships across its territories.

This will be with an eye toward initiating scheduled delivery capabilities from Green Dragon locations in 2026.

Eaze photo courtesy of PR Newswire