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Tuesday, Jan 18, 2022
Mugglehead Magazine
Cannabis & psychedelics industry news based in Vancouver, B.C.
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Cresco Labs closes US$80M acquisition of Pennsylvania operator

Another potential bill to legalize adult-use in the state was introduced in September

Cresco Labs closes US$80M acquisition of Pennsylvania operator
The deal gives Cresco one operational dispensary in the state, as well as one store under construction and three additional licences. Photo via Cresco

As it completes a sizable acquisition of a vertically integrated operator in Pennsylvania, U.S. multistate operator Cresco Labs (CSE: CL) (OTCQX: CRLBF) says it’s positioning itself to capitalize on further opening of the state’s cannabis market.

On Friday, the company said it had closed the acquisition of Laurel Harvest Labs, LLC, a deal with a previously stated value of US$80 million.

The deal gives Cresco one operational dispensary in Pennsylvania, with licensing to open five more, as well as 52,000 square feet of cultivation space. One of the additional dispensaries is currently under construction, according to a statement.

“Between the acquisition of Laurel Harvest and the previously closed Cure Penn acquisition, we are executing our strategy of strategic breadth and depth, focused on the most important states, and positioning ourselves to capitalize on the eventual expansion of the cannabis program in Pennsylvania,” co-founder and CEO Charlie Bachtell said in the statement.

After several previous attempts to legalize adult-use cannabis had failed to pass through the state’s Republican-controlled legislature, a new bill was introduced by lawmakers at the end of September.

“We are tailoring our strategy to the unique dynamics of each state to maintain our leading market position and increase profitability,” Batchell continues. “It is imperative for us to maximize our retail presence and add a second cultivation facility to optimize product quality, assortment and accessibility to maintain the number one wholesale market share in the state.”

The Laurel Harvest deal includes a clinical research partnership with the Lewis Katz School of Medicine at Temple University, which involves six ongoing cannabis studies.

Read more: Cresco Labs boosts revenues, but records US$291M charge in Q3

Read more: Trulieve enters Pennsylvania as governor pushes for legal recreational weed

In November, Cresco reported third-quarter revenue rising 3 per cent to US$215.5 million, alongside other recent acquisitions in Massachusetts and Maryland.

Company stock fell nearly 4 per cent Friday to $9.65 on the Canadian Securities Exchange.

 

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