A competitor is emerging to challenge the marijuana retail chain dominating the industry, and it just closed a $640 million acquisition

• iAnthus, a publicly-traded firm that operates marijuana dispensaries in a number of US states, acquired Toronto-based MPX Bioceutical in a $640 million stock transaction.
• The acquisition nearly doubles the firm's footprint as cannabis retailers compete for scale in the burgeoning sector.
• Earlier in October, MedMen, another cannabis retailer, scooped up PharmaCann in a $682 million acquisition.
• "We're more like frenemies than enemies," iAnthus CEO Hadley Ford told Business Insider in an interview. 

IAnthus, a publicly-traded firm that operates cannabis retail facilities in the US and Canada, acquired MPX Bioceutical, a Toronto-based cannabis company, in a $640 million stock transaction.

It's the first public-to-public acquisition in US cannabis history, according to a press release. The mega-acquisition comes on the heels of MedMen's $682 million acquisition of PharmaCann. 

iAnthus and MedMen are two of the biggest retail players in the industry — and these back-to-back acquisitions are no coincidence. Cannabis companies have been on a dealmaking tear in recent weeks as retailers in the sector race to carve out their share of the market as more US states weigh legalization following Canada's move to legalize marijuana nationwide.

"There are three key factors to this," iAnthus CEO Hadley Ford said in an interview with Business Insider. "The first is expanding our footprint, the second is national scale, and the third piece is great people."

The acquisition nearly doubles the firm's US footprint and gives iAnthus access to licenses in 10 US states — including valuable East Coast markets like New York, Florida, and Massachusetts — permitting iAnthus to operate 56 retail locations and 14 cultivation facilities.

'We're more like frenemies than enemies'

MedMen, in comparison, has a combined portfolio of 79 cannabis licenses across 12 states, including 66 retail stores and 13 cultivation licenses, following the retailer's PharmaCann acquisition. 

"MedMen's done a good job," Ford said. "We're more like frenemies than enemies. We'll be good competitors — the sector is so nascent."

Ford added that the recent mergers-and-acquisitions spree in the cannabis sector will probably leave only eight to 10 companies standing when things shake out. 

"The nascent U.S. cannabis market is still in a land-grab phase, and we feel that our footprint when combined with iAnthus, provides our investors with the strongest possible exposure to this explosive marketplace," Scott Boyes, Chief Executive Officer of MPX, said in the press release. 

As part of the merger, iAnthus will develop new brand names for its stores and products. 

Cannabis is a 'strange business'

Ford, a Goldman Sachs veteran and former healthcare entrepreneur, said cannabis is a "strange business"  because it's considered an illegal, Schedule I drug by the federal government even though it's legal in some form in 30 states and Canada. 

The US federal government doesn't allow cannabis to be shipped across state lines, so iAnthus is forced to set up individual supply and processing chains in each state.

"You have to make sure you can replicate your product," Ford said. 

"It's not like making Cheerios in Oklahoma and then shipping them across the border," he said. "The product has to look the same, taste the same, and be consistent everywhere we operate. Everything has to be identical."

Ford said he looks for states like New York — which allows medical marijuana under a restrictive regime — that limit the number of dispensary licenses they hand out. That limits competition and helps iAnthus dominate the market. 

He said his experience in building out and operating cancer treatment centers as the former CEO of ProCure Treatment Centers is what sets his management team apart.

Hiring 'great people' is a huge challenge in the cannabis industry 

Ford hopes to scale iAnthus quickly — he wants to add between 600 and 800 people over the next 12 months — and says hiring will be one of his firm's biggest challenges in the months ahead.

"The thing that keeps me up most at night, besides putting this deal together, is finding good, professional, and serious people," he said.

A year ago, Ford said, he couldn't get mid-level or senior execs at big companies to take a serious look the cannabis industry.

"Now you can," Ford said. "I'm not sure it makes it easier to bring them aboard, but once you start having discussions, you have better end results."

Overall, Ford said he's "very excited to get up every day and make our shareholder’s rich."

Read more of Business Insider's cannabis industry coverage:

• The top 12 venture-capital firms making deals in the booming cannabis industry that's set to skyrocket to $75 billion
• The CEO of the biggest cannabis company in the US reveals what's next following a $682 million acquisition
• Hedge fund legend Leon Cooperman is investing in the marijuana industry — and it's another sign the sector is heating up
• Famous short seller Andrew Left is creating a cannabis fund. He explains why the market's not in a bubble, but does need to 'chill out'
• Some of the hottest companies in the booming cannabis sector are going on hiring sprees as Canada's legal marijuana market opens
• The CEO of the largest cannabis company in the US says giant private equity firms could be his biggest competition — here's his playbook for defending against them

SEE ALSO: Top cannabis VCs give their best advice on how to invest in the booming marijuana industry

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