The all-stock deal will create the largest US cannabis company by combined 2018 sales and market capitalization.
One of the most valuable marijuana companies in the US, Curaleaf Holdings has announced a $950 million-dollar deal to acquire Cura Partners, an American company that claims itself as the largest cannabis oil producer in the US states of Oregon and California. According to sources, this is by far the largest deal between American cannabis operators in terms of dollar value. Cura Partners owns Select, a cannabis leader operating in Oregon, Nevada, and California. The all-stock deal will give rise to the biggest cannabis company in the US in terms of combined 2018 sales and market capitalization, Curaleaf and Cura Partners announced.
“The Curaleaf-Select combination is a perfect fit. With Select’s impressive marketing and sales capabilities, Curaleaf’s expansive retail distribution network, and its industry leading capacity, our company is intending to accelerate its top line growth trajectory meaningfully as the range of Select Oil products adds up,” said Joseph Lusardi, CEO of Curaleaf (source).
The deal between Curaleaf and Cura Partners will drive cost savings
The combination of Cura Partners’ West Coast footprint and Curaleaf’s East Coast footprint is expected to bode well for both the companies. The combined company will enjoy presence in a minimum of 15 US states. Lusardi said that the combination of the two companies will result in a 50% reduction in Select’s material costs and a 25% drop in processing costs. Clearly, the deal is set to encourage some cost savings. It is expected to see closure this year.
After the announcement of the deal, Curaleaf saw its shares jumping over 15%. The deal comes after a spate of cannabis deals and consolidations in the recent time. Just a couple of weeks ago, Canopy Growth, a Canadian cannabis firm, and Acreage Holdings, a US medical cannabis company, entered into an agreement. The $3.4 billion-dollar agreement will help Canopy Growth with a platform to gain access into the extensive US cannabis market. If estimated, the cannabis market in the US is approximately 10 times as large as the Canadian market.