Cresco Labs and Columbia Care call off deal

On Monday (July 31), Cresco Labs and Columbia Care confirmed the end of a US$2 billion agreement that was set to create a cannabis behemoth in the US market, which is set to achieve legal sales of US$35 billion in 2023.

The tie-up was set to be one of the largest in the still-young cannabis industry, and was seen as indicative of the consolidation period the industry is going through.

"While this is not the outcome we originally hoped for, we are confident Cresco Labs is in a stronger position moving forward,” Charles Bachtell, CEO and co-founder of Cresco Labs, said.

For his part, Nicholas Vita, CEO and co-founder of Columbia Care, was appreciative of the experience for his firm and said his company has become a better operator from being involved in the process.

"Over the last 16 months we have reviewed every aspect of our business, remained decisive and have made substantive changes that significantly improved our operations — positioning us with significant strategic and operational strength at this inflection point in the company’s history," Vita said in a press release.

The main issue dragging down this deal relates to ongoing capital issues for cannabis operators. According to Matt Bottomley, a cannabis analyst with boutique investment firm Canaccord Genuity, a "relatively shallow pool of investment dollars coming into the industry made the required pending asset dispositions less attractive than originally anticipated.”

Following the dissolution of the deal, Columbia Care notified investors it will be moving forward with expansion plans in Virginia, as well as with a voluntary delisting from the Canadian Securities Exchange.

Cannabis REIT reports financials

Leading medical cannabis REIT Innovative Industrial Properties (IIP) (NYSE:IIPR) issued its Q2 financial results.

On Wednesday (August 2), the company reported revenue of US$76.5 million, an 8 percent increase over the same period last year. IIP was able to achieve a net income line of US$40.9 million.

Thanks to these results, the company was able to pay a quarterly dividend of US$1.80 per share on June 30.

"The (revenue) increase was driven primarily by activity in prior periods for the acquisition and leasing of new properties, additional building infrastructure allowances provided to tenants at certain properties that resulted in increases to base rent, tenant reimbursements and contractual rental escalations at certain properties," the company said in a statement.

Cannabis company news

• Trulieve Cannabis (CSE:TRUL,OTCQX:TCNNF)confirmed the relocation of a medical cannabis dispensary in Kissimmee, Florida. "This new location delivers on that commitment and we will continue to seek new opportunities to better serve this community," Kim Rivers, Trulieve's CEO, said.

• AYR Wellness (CSE:AYR.A,OTCQX:AYRWF)added Michael Warren to its board of directors. “Michael’s successful career in financial services and his pioneering work in workplace Diversity Equity & Inclusion initiatives will bring immense value and perspective to our organization,” Jonathan Sandelman, executive chairman of AYR, said.

• Delta 9 (TSX:DN,OTC Pink:DLTNF)announced its intention to expand a distribution and cross-docking business in Manitoba, Canada, as a result of changing regulations in the province. “We believe that these changes will allow us to significantly expand our list of cross-docking and distribution customers and increase overall revenues from this new growth segment," said John Arbuthnot, CEO of Delta 9.

• Organigram Holdings (NASDAQ:OGI,TSX:OGI)launched a new line of pre-roll products in the Canadian market. "These tube-style pre-rolls mark the inception of 0.4g pre-rolls for Organigram, crafted using the state-of-the-art, high-speed Cantos tube-style rolling machine, complemented by cutting-edge packaging capabilities," the company said.