Cannabis company to acquire Columbia Care in $2 billion deal

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A Chicago-based cannabis company has announced plans to acquire Columbia Care, which has a medical marijuana and recreational cultivation presence in Riverhead, in an all-stock merger valued at $2 billion.

The proposed merger, which was announced in March, is subject to closing conditions and regulatory approvals and is expected to close in the fourth quarter of 2022, according to a press release issued last month. The deal would make Cresco Labs the nation’s leading cannabis company with over $1.4 billion in revenue and the largest wholesaler of branded cannabis products and largest retail footprint with over 130 stores. retail in 17 states plus Washington DC.

In a statement, Cresco Labs CEO Charles Bachtell said the announcement comes at a “very important time” in the progress of the marijuana industry.

“This acquisition brings together two of the industry’s leading operators, combining a premier footprint with proven operational, brand and competitive excellence. The combination is highly complementary and offers unparalleled scale, depth, diversification and long-term growth,” Mr. Bachtell said.

News of the merger comes nearly a year after Columbia Care increased its stake in the local potty business with the Purchase of $42.5 million from the Van de Wetering greenhouses on Sound Avenue in Jamesport.

At the time, Columbia Care officials said the site would complement the company’s existing medical marijuana grow operation in Western New York and better position it to grow recreational pot.

Columbia Care opened the first in Suffolk County medical marijuana dispensary on East Main Street in Riverhead in January 2016.

Originally founded as a medical company, Manhattan-based Columbia Care has grown to become one of the nation’s largest multi-state providers of medical cannabis with licenses in 18 U.S. states and jurisdictions as well as the United States. European Union. It operates 131 facilities, including 99 dispensaries and 32 cultivation and manufacturing facilities, including those under development.

“Since our inception, our mission has been to deliver the best outcome for our stakeholders,” Columbia Care CEO Nicholas Vita said in a statement. “In a changing industry, opportunities to better achieve our mission through consolidation have led us to this historic moment.”

Cresco Labs produces a range of brands including Cresco, High Supply, Mindy’s Edibles, Good News, Remedi, Wonder Wellness Co. and FloraCal Farms. Sunnyside, their national dispensary brand, is a wellness-focused retailer that was “created to build confidence, education, and convenience for existing and new cannabis consumers.”

The acquisition will give Cresco Labs a presence in key states such as New York, New Jersey, Florida, Massachusetts, Illinois, Pennsylvania, Colorado and Virginia.

“The combination of Cresco Labs and Columbia Care accelerates our journey to becoming the leader in cannabis in a way that no other potential transaction could,” Mr. Bachtell said.

The boards of each company have already unanimously approved the transaction, the press release said.

New York is poised to become an epicenter of cannabis activity in the Northeast after legalizing recreational marijuana for adult use in 2021. Several neighboring states, including New Jersey and Connecticut, are also rushing to open their recreational markets.

The state is expected to begin licensing dispensaries and grow facilities later this year.

In mid-March, the state opened an online application portal for hemp growers to apply for temporary marijuana cultivation and processing licenses to supply stores that will revive the legal industry while permanent licensees are chosen.

According to state officials, the first 100 retail licenses to sell recreational marijuana will be restricted to those with prior cannabis-related criminal offenses, a move Governor Kathy Hochul said. to be a “major step” towards social justice. “The regulations…will prioritize local farmers and entrepreneurs, creating jobs and opportunities for communities that have been left out and left behind. I’m proud that New York is a national model for the safe, fair, and inclusive industry we’re building now,” Ms. Hochul said.

Under state marijuana law, municipalities had the option of not allowing dispensaries or venues to publicly engage in marijuana use until late last year. The towns of Riverhead and Southampton will allow these facilities to open in towns while nearby Southold has voted not to allow retail and consumption sites in town.

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