Licensed Canadian cannabis company Cronos Group Inc. announced on Monday it had reached a deal with Pharmacann that would allow a subsidiary of the Toronto-based firm to acquire a potential 10.5% ownership stake Chicago, Illinois-based cannabis operator.
The option would be exercised based on various factors, Cronos said in a press release, including U.S. federal legalization and regulatory approvals in the states where Pharmacann operates. The company operates both medical and adult-use locations in Ohio, Pennsylvania, Massachusetts, New York, Illinois, and Maryland, according to the Pharmacann website.
Kurt Schmidt, president and CEO of Cronos Group, said the company was attracted to Pharmacann “because of their disciplined capital allocation, strong track-record, and compelling licensed manufacturing and retail footprint.”
“Our U.S. growth strategy focuses on delivering long term shareholder value by assembling a best-in-class brand and intellectual property portfolio and positioning to deploy our products in the U.S. market through investments and opportunities with U.S. leaders who share our vision and commitment to responsibly distributing disruptive cannabinoid products that improve people’s lives.”—Schmidt in a statement
Cronos paid $110.4 million for the option which will be distributed directly to Pharmacann shareholders, the company said.
Pharmacann CEO Brett Novey said the investment “validates [the company’s] position as a leading vertically integrated U.S. cannabis company” while highlighting the firm’s “ability to continue to expand and enhance” its asset base.
Cronos trades in the U.S. on the NASDAQ under the CRON symbol.
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