This could be one of the biggest deals in the young history of the cannabusiness. The American Cresco should soon announce the takeover of its rival, Columbia Care, for two billion dollars. This is reported by the well-informed Reuters news agency, which relies on “three sources familiar with the matter”. For the time being, the management of the companies concerned have not reacted. “An agreement could be announced this Wednesday”says the Reuters journalist.
Cresco specializes in the production – through its brands Mindy’s, High Supply or Good News – and the distribution of cannabis, with its Sunnyside stores. These shops are mainly present in the eastern United States, from Illinois to Florida. Another strong point: he leaves ahead of schedule for New York, which will soon legalize recreational cannabis.
For its part, Columbia is also present in the eastern United States… but also very well established in large western markets. In California, he owns half a dozen stores in Los Angeles, San Francisco or San Diego. And in Colorado, he already owns about twenty stores. Which makes a major rival for Cresco… who therefore chose to swallow it.
“Not the biggest acquisition in history, but a very big one”
Currently, Cresco is worth $1.8 billion. Columbia is a bit smaller, with a market valuation of 1.2 billion. With a transaction estimated at 2 billion – almost its weight on the stock market – Cresco is therefore making a big effort. “It’s not the biggest acquisition in the history of cannabis, but it’s still a very big one”notes Antoine Quesnel, a French trader specializing in the values of cannabis companies.
For the American cannabis giants, it’s time to regroup. The plant is still prohibited at the federal level, in the United States, which greatly complicates their activity. “To sell cannabis, you have to produce it and sell it in the same state, so it costs a blind, continues Quesnel. Si Cresco wanted to get into California, it would take them two years. There, they buy Columbia and are present tomorrow. »
And it is moreover exactly the same principle for another recent deal. Last spring, Trulieve bought out one of its competitors, Harvest. Reason given? ” VSit allows us to accelerate our entry into Arizona”in the words of the CEO of Trulieve.
