Curaleaf Holdings (CSE:CURA,OTCQX:CURLF) solidified itself as a standout in the US cannabis market after it announced on Wednesday (July 17) its acquisition of the privately-held GR Companies (Grassroots) valued at US$875 million.

The deal has resulted in Curaleaf now calling itself the world’s largest cannabis company by revenue and the largest in the US across some operating metrics.


The cash and stock agreement is expected to close in early 2020 pending approval from shareholders as well as the board of directors from both companies. The deal has brought together “the largest public and largest private multi-state operators in the US,” the press release reads, to offer cannabis products to customers across the country.

 

Cannabis - Will The Fortune 500 Join The Party?

 
Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!
 

With the acquisition, Curaleaf is getting control of Grassroots’ 61 dispensary licenses, 20 of them currently in operation, as well as 17 cultivation and processing licenses. After the merger, Curaleaf’s presence will expand to 19 states from 12. The newly combined company will have 131 dispensary licenses, 68 physical locations, 20 cultivation sites and 26 processing facilities.

Along with Grassroots’ entire portfolio, Curaleaf is also gaining access to new markets, including Illinois, which became the 11th state to legalize recreational cannabis use last month, and Pennsylvania.

The transaction puts Curaleaf in the top position among multi-state operators (MSOs) in the US now that the company has extended its reach into Arizona, California, Nevada and Ohio.

In a press release, Curaleaf CEO Joseph Lusardi said of the transaction, “(It) significantly accelerates our expansion strategy and strengthens our reach across the medical and adult-use markets.”

 

Cannabis - Will The Fortune 500 Join The Party?

 
Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!
 

He added that the deal will enhance the depth of Curaleaf’s wholesale and retail platforms across the US.

This isn’t the first big move the US-based cannabis retailer has made this year. In May, it announced the acquisition of Cura Partners, owner of the Select brand of cannabis products, in an all-stock deal valued at US$948.8 million (C$1.27 billion). The deal will close sometime this year and includes Select’s adult-use cannabis products as well as all of its operations, covering manufacturing, distribution and marketing.

Robert Fagan, an analyst at GMP Securities, told the Investing News Network (INN) that the merger has given Curaleaf “a true national presence” in the US cannabis space.

“In every important state, (it has) assets now that are operational and generating revenues … whereas in some instances, other competitors have license holdings in certain states, but don’t don’t have anything operational,” Fagan said.

He added that, while recreational cannabis use still isn’t legal at the federal level in the US, the markets that exist within individual states are robust. For Fagan, this merger is a prime example of the growing interest in the US cannabis industry.

“Pretty big acquisitions are being made, large amounts of money are exchanging hands and all that without a federally permitted marketplace,” he told INN.

Once the transaction closes, Grassroots’ co-founder and CEO Mitch Kahn will serve on the Curaleaf board of directors. Matt Darin and Steve Weisman, Curaleaf’s co-founders, will join the senior management team.

The company’s Q1 results for 2019 reported Curaleaf’s total revenue at US$35.25 million, up from the US$31.96 million in the previous quarter, an increase of 10 percent.

Curaleaf share prices jumped Wednesday, closing at C$9.95, an increase of over 17 percent from Tuesday’s closing price of C$8.49. Shares rose again today, opening at C$10.19. The company’s market cap currently sits at C$3.61 billion.

Don’t forget to follow us @INN_Cannabis for real-time news updates!

Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article. 

The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

 

Cannabis - Will The Fortune 500 Join The Party?

 
Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!
 

One major cannabis analyst gave her top stock pick this week as industry attention continues to converge on the path ahead for the US market.

Also this week, the CEO of Aphria (NASDAQ:APHA,TSX:APHA) gave an update on a critical merger and spoke about who holds the edge in the US in terms of American and Canadian cannabis operators.

Keep reading... Show less

Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) (“Cronos Group” or the “Company”) will hold its 2021 First Quarter Earnings Conference Call on Friday, May 7, 2021 at 8:30 a.m. EDT. Cronos Group’s senior management team will discuss the Company’s financial results and will be available for questions from the investment community after prepared remarks.

A live audio webcast of the earnings call will be available on the Company’s website at https://ir.thecronosgroup.com/events-presentations . The webcast of the call will be archived for replay on the Company’s website.

Keep reading... Show less

An Emerging Markets Sponsored Commentary

A report just released in early April confirms that the cannabis beverage sector is thriving. According to this report from industry stalwart, Marijuana Business Daily while sales for vapes, pre-rolls and flower were lackluster, cannabis beverages shined:

Keep reading... Show less

BevCanna Enterprises (CSE:BEV,OTCQQ:BVNNF,FWB:7BC) CEO Marcello Leone shared how the company is scaling up its products to forge partnerships and explore opportunities across Canada, the US and Western Europe. 

“Getting your standard processing license and being fully compliant at a federal level is critical in Canada, and we were successful in getting that done. Now we’re getting ready to launch our Keef line of beverages within the next 45 days,” Leone said. 

As a young company, Leone said BevCanna has only started, but it took a four-pronged approach to make sure that it is a revenue-generating company prepared for the opening of many jurisdictions for CBD-based products.

“We are blessed that we have a beautiful infrastructure of our own, a state-of-the-art bottling facility with a capacity of almost 200 million bottles per annum and a strong balance sheet of $55 million. We are in a strong position to scale and grow this company.”

BevCanna has received a Standard Processing License from Health Canada and is now fully authorized to begin production at its full-service, high-capacity beverage manufacturing facility. The company will begin production of its white-label products, number one US cannabis beverage brand Keef and its in-house beverages through licensed Canadian retailers, positioning the company to fully capitalize on the burgeoning Canadian cannabis-infused beverage sector.

Watch the full interview with CEO Marcello Leone above.

Keep reading... Show less

BioHarvest Sciences (CSE: BHSC) will be presenting at the Benzinga Cleantech Small Cap Conference taking place on April 22, 2021. We invite our shareholders and all interested parties to explore cleantech small cap investment opportunities through two days of networking, dealmaking and discovery.

Sign up to get a free spectator pass for the event: https://www.benzinga.com/events/small-cap/clean-tech/

Keep reading... Show less