Curaleaf Holdings Inc. (CSE: CURA) (OTCQX: CURLF) is set to expand its footprint in the medical cannabis market with the acquisition of Deseret Wellness, one of Utah’s leading cannabis suppliers, for approximately US$20 million in cash and stock.
The deal announced on Wednesday is expected to be completed shortly, positioning Curaleaf for further growth in the rapidly-evolving cannabis industry.
Through the deal, Curaleaf will be obtaining three retail locations from Deseret and expanding its retail footprint to include a total of four dispensaries in Utah.
The dispensaries acquired from Deseret are located in Park City, Payson and Provo and generate approximately US$14 million annually.
“Deseret has built a strong and profitable business, and we believe the combination of our two companies will enhance our competitive position in the Utah market,” said Curaleaf’s CEO Matt Darin.
“This deal represents the largest cannabis retail change of ownership in the state’s history and bolsters our strong position in the market with an attractive portfolio of retail assets,” said Boris Jordan, Curaleaf’s Executive Chairman.
Prior to the impending Utah acquisition, Curaleaf significantly expanded its retail presence in Nevada and Arizona last October when it acquired six stores from Reef Dispensaries for US$181 million.
In September 2022, Curaleaf expanded its international presence by acquiring a 55 per cent stake in the German cannabis company Four 20 Pharma. Curaleaf is set to acquire the remaining 45 per cent early next year.
Utah opened its first medical cannabis dispensary in Salt Lake City in 2020 and the state is yet to legalize adult use/recreational pot. Currently, possession of small amounts in the state without a license can result in a misdemeanour offense.
Curaleaf’s stock dropped by 2 per cent Thursday to $3.93 on the Canadian Securities Exchange and has been on a steady decline since March 7 when it was worth $5.31.