Cresco Labs Inc. CRLBF announced its plans to enter the Florida market by signing a letter agreement to acquire the ownership interest or assets of VidaCann Ltd for about $120 million in cash and stock.
Why It Matters
The acquisition of VidaCann gives Cresco Labs, one of the largest vertically integrated cannabis companies in the United States, access to business in Florida. The state’s medical cannabis market is expected to rise to $1.7 billion by 2022, according to data from Arcview Market Research and BDS Analytics.
“Since relaunching its cannabis program in 2017, Florida has seen tremendous growth in patient registration and is one of the most important markets in the country,” said Cresco Labs CEO and co-founder Charlie Bachtell. “VidaCann is the perfect blend of an established operational footprint and infrastructure of professionals that will allow Cresco to execute its disciplined and strategic Florida plan expeditiously."
The deal also expands Cresco Labs’ access to 65 percent of the addressable U.S. cannabis market.
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Cresco Labs cited numerous benefits of the deal. In addition to access to the state, Cresco obtains seven operational dispensaries, with that number slated to double by the end of June. If approved, Cresco will then gain access to markets including Jacksonville and Miami.
The acquisition also provides Cresco with a license to handle its supply chain, including growing, processing, manufacturing, distributing and dispensing its cannabis products. The company also acquired an analytics lab and a fully-operational greenhouse that is scheduled to double in size by the end of this year.
Per the agreement, all 100 of VidaCann's employees will be retained and continue working under Cresco Labs.
Cresco Labs President and Co-Founder Joe Caltabiano explained how the acquisition expands the company's reach in the U.S.
"Matching our proven ability to execute operationally with unparalleled speed to the foundation already established by VidaCann, we expect to efficiently scale our Florida operations, immediately impact the market, and get the same high rate of market share that we have achieved in other states in which we operate."
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