Cannabis Operator Cresco Labs Picks Up Competitor Columbia Care in $2B Deal
By Nicholas Rizzi March 23, 2022 1:05 pm
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Cannabis operator Cresco Labs plans to acquire competitor Columbia Care in a $2 billion deal that will make Cresco the largest U.S. company in the marijuana space by revenue, the company announced Wednesday.
The all-stock deal, expected to close in the fourth quarter, will boost Cresco’s retail footprint to more than 130 stores across 17 states and add two more New York City storefronts to its portfolio of one unit in Williamsburg, Brooklyn.
“This acquisition brings together two of the leading operators in the industry, pairing a leading footprint with proven operational, brand and competitive excellence,” Cresco CEO Charles Bachtell said in a statement. “The combination of Cresco Labs and Columbia Care accelerates our journey to become the leader in cannabis in a way no other potential transaction could.”
After the acquisition, the Chicago-based Cresco will have the second-largest legal cannabis footprint in the country and an expected $1.4 billion-plus in pro-forma revenue per year, according to Cresco.
Cresco had been in talks to buy the New York City-based Columbia Care for months, Bloomberg reported.
As part of the agreement, Columbia Care investors will get 0.58 subordinate voting shares of Cresco for each Columbia Care share, about a 16 percent premium for Columbia Care shareholders.
The cannabis industry is primed for growth across the country — with the number of retail outlets expected to increase through 2022 — but faces roadblocks as operators need to navigate through a patchwork of legalization laws while the drug remains illegal at the federal level. Despite a recent push from lawmakers to decriminalize marijuana federally, it seems stuck in Congress, The Wall Street Journal reported.
Nicholas Rizzi can be reached at nrizzi@commercialobserver.com.
