Cresco Labs Inc. (OTCMKTS: CRLBF) has announced the execution of a definitive agreement to purchase a 100% outstanding equity stake in Bay LLC d/b/a Cure Pennsylvania for a total consideration of around $90 million. The company expects to close the transaction in Q4 2021.
Cresco Labs implementing localization strategies
CEO and Co-Founder Charlie Bachtell said, “As we implement localization strategies tailored to state level dynamics, this Transaction with Cure Penn is expected to expand our retail footprint in Pennsylvania, increase profitability, and strengthen our wholesale leadership position in the state. We’re thrilled to continue executing our playbook of achieving depth in strategic markets via rigorous capital allocation.”
Bachtell added, “The Cure Penn team has developed a high-performing retail platform across three dispensaries that sets up another immediately accretive acquisition for Cresco Labs. We’ve proven our ability to drive incremental top and bottom-line growth from the implementation of Sunnyside’s best-in-class operating model, and we look forward to growing our house of brands which are already among the most sought after by patients in Pennsylvania.”
The acquisition is to acquire three Cure Penn dispensaries located in Phoenixville, Philadelphia, and Lancaster. Most importantly, the Cure Penn dispensaries will be complementary and incremental to the company’s current Sunnyside dispensaries in the commonwealth of Pennsylvania.
Transaction to cost $90 million
The total consideration for the Transaction is $90 million, which will be fulfilled at closing via stock and cash payments. The company will execute the transaction on a debt-free, cash-free basis with a normalized working capital target level that has been mutually agreed upon. The Transaction’s completion is contingent on the approval and receipt of all needed CSE and regulatory clearances, among other things.
Cresco Labs is a multistate operator seeking to professionalize and normalize the cannabis sector through a consumer-packaged goods approach. It is currently the largest branded cannabis products wholesaler in the US.