Chicago, Illinois-based Cresco Labs is set to acquire California’s Origin House in an $850 million, all-stock deal, the company announced on Monday. Origin House is a cannabis distribution company known as CannaRoyalty in Canada with about 60 percent market penetration. The deal will see the Cresco cannabis brand in more than 725 dispensaries nationwide.
Cresco already grows and sells cannabis and cannabis products in California. The deal is the largest-ever public company acquisition so far in the cannabis space – both companies are traded on the Canadian Securities Exchange.
Cresco Labs CEO and Co-founder Charlie Bachtell said the deal gives the company “the largest and most strategic distribution footprint of any cannabis company in the U.S.”
“This significantly accelerates our efforts to build the first national house of brands with broad and deep positions in the largest cannabis markets in the country. Cresco will have industry-leading brand development and distribution capabilities, which we believe will result in significant value creation for consumers and our shareholders alike as the market for medical-use and regulated adult-use cannabis continues to grow at a rapid pace.” – Bachtell, in a statement
Origin House Chairman and Chief Executive Marc Lustig told Bloomberg News that the deal will give the company access to 10 additional states.
“This transaction is directly aligned with our strategy to build a leading portfolio of cannabis brands in California and to rapidly and assertively take those brands to the rest of the U.S. market, as well as the Canadian market,” he said in the report.
Under the terms of the deal, Origin House shareholders will see 0.8428 of Cresco stock for each share held. The deal is expected to be finalized in June.
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