Vertically integrated cannabis company Cresco Labs Inc. CL CRLBF reported Monday it has signed a purchase agreement to buy certain assets from cannabis company Tryke Companies.
With this agreement Cresco Labs will expand its presence acquiring six prime Reef Dispensary locations in Nevada and Arizona, licensed cultivation and process capacity in Phoenix and Las Vegas, and it will enter the Utah market, the company said.
Entering the Utah market will mark the company’s access to a 12th state, and the transaction will also make the company one of the top 3 cannabis operators in Nevada, and it will increase its market share in Arizona by 300%, as per the press release.
Cresco Labs said the purchase price is set to around $282.4 million, which will consist of the company’s shares (around $227.5 million) and cash (around $55 million). It is expected for the transaction to close in the first half of 2020.
“We expect that this Transaction will both accelerate our near-term growth trajectory and further advance Cresco Labs towards our goal of being the most important company in the cannabis industry, " Charlie Bachtell, Cresco Labs CEO and Co-founder, said in a statement.
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Cresco Labs also announced Monday that it has signed an agreement with a group of investors led by Canaccord Genuity Corp. upon which the underwriters will buy a total of 7,350,000 company’s units with a price of CA$10.00 per unit for aggregate gross proceeds of CA$73,500,000.
The company reported it plans to use the proceeds to support its business progress, for working capital requirements and ordinary corporate purposes.
After closing pending transactions, Cresco Labs will own 25 production facilities, and 29 retail dispensaries in operation with licenses to run 62 retail dispensaries in 12 states.
Sharesd were trading down 8.34% at $7.25 Monday afternoon.
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