Cannabis Co Curaleaf Expands In Colorado Via Los Sueños Farms Acquisition
Transaction details: Under the terms of the agreement, the Wakefield, Massachusetts-based company agreed to purchase three outdoor cannabis grow facilities in Pueblo, Colorado covering 66 acres of cultivation capacity.
The company agreed to pay roughly $49 million for the Los Sueños operating companies and $18 million for the assets in relation to the real estate and farm.
The sum will be paid in the combination of Curaleaf subordinate voting shares (61%) and cash (29%) at closing, with the remaining 10% to be paid in assumed debt maturing in five years.
In addition, Curaleaf agreed to pay an additional $8 million in stock upon achieving particular operating cash flow-based targets for 2022.
What It Means For Curaleaf: The acquisition will boost Curaleaf's footprint in Colorado with land, as well as a 1,800 plant indoor grow and two shops selling recreational cannabis.
"The acquisition of Los Sueños provides Curaleaf with outdoor cannabis cultivation expertise at commercial scale and establishes our foothold in the $2.2 billion Colorado market," Boris Jordan, executive chairman of Curaleaf, disclosed Monday.
The company aims to set up low-cost supply chains that will position it for interstate commerce once cannabis becomes legal on the federal level.
What's Next: Jordan said the acquisition of Los Sueños is a step toward achieving the goal of cultivating cannabis at less than $100 per pound.
"The acquisition of Los Sueños will add over 50,000 pounds per year of low-cost wholesale capacity to Curaleaf's footprint in Colorado, which we intend to double to over 100,000 pounds, representing a significant market share," Joseph Bayern, the company's CEO, explained.
Curaleaf recently revealed that its revenue increased 170% year-over-year and 13% sequentially to $260 million in the first three months of 2021.
CURLF Price Action: Curaleaf shares were trading 2.36% higher at $14.74 at last check Monday.
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