Curaleaf Holdings is all set to become the world’s largest cannabis company by revenue with the acquisition of Chicago-based Grassroots Cannabis in an $875 million cash and stock deal.
The deal implies that Curaleaf will now have a strong hold in the midwest region. “Curaleaf has a strong presence on the east coast and we are working to fill out the west coast,” Curaleaf CEO Joe Luardi told the media. “What we lacked was a midwest presence and Grassroots has helped us fill that gap.”
Lusardi added that Grassroots’ licensed operations in Illinois, Michigan and Pennsylvania were the major reason behind this deal.
The deal is reportedly expected to close early in 2020, and Mitch Kahn, CEO of Grassroots, will take a board seat at the combined company. With the acquisition, Curaleaf’s reach will expand to 19 states (roughly 177 million people) and as many as 131 dispensary licenses.
The two companies took a long time to reach a decision though, partly because of the scale of operations and partly due to the conflicting federal, state and local cannabis laws.
A boutique Canadian Investment bank named Eight Capital acted as a financial advisor on the deal.
Such mega-mergers are nothing new to the marijuana industry. Last year, the industry saw more than 200 deals worth over a combined $15 billion. Apparently, the industry is right on track to outperform itself in terms of the value and the number of deals this year.