Marijuana products are displayed at the Cresco Labs Sunnyside Lakeview dispensary in Chicago.
Daniel Acker/Bloomberg
Cresco Labs reached an agreement to acquire Columbia Care, a fellow Canadian marijuana company, for $2 billion.
The merger is expected to create one of the largest U.S. multistate cannabis operators based on pro forma revenue, with more than 130 retail stores across 18 markets, the companies said on Wednesday.
“The combination is highly complementary and provides unmatched scale, depth, diversification and long-term growth,” said Charles Bachtell, CEO of Cresco Labs (ticker: CRLBF).
Columbia Care shareholders will receive 0.5579 of a subordinate voting share of Cresco Labs for each Columbia Care common share they own. The price is a premium of about 16% based on Columbia Care’s closing price as of March 22. At the transaction’s close, Columbia Care will hold about 35% of the pro forma Cresco Labs shares.
The deal is expected to close in the fourth quarter.
The companies hope to have annual revenue in excess of $100 million in eight different states by 2023 as the combined company diversifies its revenue base and expands to other markets. Currently, they have leading positions in four top markets — Illinois, Pennsylvania, Colorado, and Virginia — and plan to keep expanding in other states.
Shares of Cresco Labs were down 6% to $6.16 on Wednesday. Columbia Care was up 1.3% to $3.16.
Write to Sabrina Escobar at [email protected]
