Curaleaf to become world's largest cannabis firm after $875M deal
Photo | Edd Cote
Medical marijuana for sale at Curaleaf in Oxford.
Curaleaf, with its Massachusetts medical and retail cannabis operations largely in Worcester County and Central Massachusetts, says it is now the world’s largest marijuana company after announcing and agreement Chicago-based Grassroots for $875 million.
The deal, announced Thursday, calls for $75 million in up front cash, 102.8 million subordinate voting shares of Curaleaf and $40 million in Curaleaf shares priced at a 10-day volume-weighted average price prior to the deal closing.
Once complete, security holders in the privately-owned Grassroots will have about 16% pro forma ownership in Curaleaf.
The deal is expected to close in early 2020.
Curaleaf is headquartered in the North Shore town of Wakefield, but its Massachusetts cultivation and product manufacturing operation is located in Webster.
The company also operates a medical marijuana dispensary in Oxford and has secured a provisional license from the Massachusetts Cannabis Control Commission to add recreational sales at the location.
Applications for other retail dispensaries have been submitted for Ware and Provincetown.
According to CCC records, Grassroots does not have any open state license applications, but a business entity, Grassroots Properties MA Newton, LLC, is registered to Grassroots CEO Matthew Darin, who will join Curaleaf’s senior management team.
Per state regulations, cannabis firms in Massachusetts are limited to three retail licenses.
The transaction expands Curaleaf’s market reach from 12 states to 19, including Illinois and Pennsylvania, the first of which became the 11th state to legalize recreational marijuana last month.
The deal also gives Curaleaf access to new markets in Arkansas, Michigan, North Dakota, Oklahoma and Vermont. Acquiring Grassroots gives Curaleaf new business in its existing markets of Connecticut, Maryland, Nevada and Ohio.
The combined company will control 131 dispensary licenses, 68 open dispensaries, 20 cultivation sites and 26 processing facilities.
The company's stock rocketed up nearly 20% on Thursday after the news release, trading above $7.50 per share for most of the day after closing at $6.51 Wednesday.
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