When we posted the Liberty Health Sciences, Inc. (CSE:LHS) (OTC:LHSIF) investor deck, we mentioned that there were hints as to the future developments at the company. For those not familiar with Liberty, it is the American sister company of Aphria Inc. (TSX:APH) (OTC:APHQF) with operations in Florida and high hopes for Ohio next.
Out of a population of over 11 million people, Ohio boasts a whopping 2.8 million qualified medical marijuana patients. To make the opportunity more enticing, Ohio's Department of Commerce is only issuing twelve Tier I licenses which allow the holder to have up to 25,000 square feet of cultivation space. This is a massive grow space when compared to the 3,000 square foot maximum grow space cap that is imposed on Tier II licensees.
While Ohio just announced the first batch of Tier II licenses, Tier I license winners are expected to be announced in the coming weeks.
With 109 Tier I applicants and just twelve licenses to go around, there is a roughly 11% chance that Aphria/Liberty's applicant entity will be approved if all applicant qualifications were equal... but they are not.
Just as Tier II applicants received scores, so will the Tier I applicants. This means that the best applicants win licenses, not just random applicants out of a hat.
How Does this Bode for Aphria/Liberty?
In our opinion, this application framework bodes very well for Aphria/Liberty. First and foremost, the two have seemingly endless access to capital for financing such an endeavor, along with tremendous expertise when it comes to cultivating top-quality cannabis. Beyond that, Aphria/Liberty have one more major edge going for them in Ohio: the Schottenstein seal of approval.
The companies' applicant entity is called Schottenstein Aphria LLC, due to the family that Aphria partnered up with for its Ohio expansion efforts. While the name Schottenstein may not mean anything to you at first glance, a quick dig into who that family is and you'll soon realize just how much clout they have.
Who are the Schottensteins?
According to Forbes, "The private family members are based in Columbus, Ohio and rarely appear in news media. They are best known locally not for the many companies they founded but for funding Ohio State's basketball arena, the Jerome Schottenstein Center, nicknamed The Schott."
Jerome Schottenstein "built a retail empire that included Value City Furniture and the predecessor to Big Lots." His son Jay, now runs the show and chairs DSW (NYSE:DSW) and American Eagle Outfitters (NYSE:AEO). while overseeing a handful of other family investments. With a net worth last measured at $2.7 billion in 2015, the family's fortune landed them on Forbes' list of America's richest families.
They were a great choice to partner with for Aphria's Midwest expansion because of their retail industry expertise, especially within Ohio. According to WeedDaily.net, Aphria co-founder Cole Cacciavillani commented on the partnership, “Combined, we could be a really strong entity.”
We'll be sure to update readers as soon as Ohio issues their Tier I licenses, and we'll be waiting to see whether or not the combined powerhouses get one. Be sure to subscribe to one or more of our other free e-mail newsletters so you never miss an important marijuana stock update. Also, don't forget to connect with The Daily Marijuana Observer on social media via Facebook, Twitter, StockTwits, YouTube, and Instagram.