Cresco Labs has announced that it has closed the acquisition of CannaRoyalty Corp, also known as Origin House.
Following an Origin House shareholder vote held on New Years Eve, Cresco Labs Inc. (CSE: CL) has since provided an update on the acquisition of CannaRoyalty Corp. and Origin House (CSE:OH), announcing that the arrangement has been closed and the acquisition is now complete, at an estimated total value of C$517 million. Through the acquisition, Cresco has massively increased its footprint as well as cementing the company's position as a dominant player within California.
This is a transformational deal for Cresco and represents the culmination of the better part of a year's work for both the Cresco and Origin House teams.Charlie Bachtell, Cresco's CEO and Co-founder.
"With the closing of this transaction, Cresco is in a position to accelerate its entry into one of the largest legal cannabis markets in the world, while adding valuable expertise in wholesale distribution and brand development, which we expect will drive significant value for all of our shareholders as we scale across the country in the coming years. We also see meaningful synergies across our national footprint through the addition of Origin House's ultra-premium indoor cultivation team, which we expect will assist us in our goal to consistently outperform the market on yield and quality metrics."
Mr. Bachtell continued, "In an industry that is in flux, Cresco is one of the most fundamentally sound and best-positioned multi-state cannabis operators in the U.S. The Company has built an engine that is designed to execute operationally, develop leading brands and get them into the hands of consumers to drive growth and value across all three horizons – short, medium and long term."
Marc Lustig, Chairman and CEO of Origin House also made a comment on the recent acquisition, in which he stated that "Cresco's focus on the middle two verticals of the value chain – brands and wholesale distribution – as the key to creating long-term shareholder value, is aligned with the philosophy we had at Origin House. Speaking as one of the largest former shareholders of Origin House and now an enthusiastic and significant Cresco shareholder, I am looking forward to the opportunity for this combined team to create value for all of our shareholders."
Marc Lustig, who previously served as the Chairman and CEO of Origin House, will now be added to Cresco's board of directors, following receipt of certain U.S. regulatory approvals.
Through the acquisition, Cresco has since become a major player in the wholesale cannabis distribution industry in California, now providing cannabis to over 575 dispensaries, selling over 50 brands which total over 60 percent of California's total storefront dispensaries. Not only that, but Cresco has also gained access to Origin House's Continuum distribution platform which distributes 13 third-party brands.
It's looking likely that Cresco's range of branded products will be expanding in the near future, as the company now has access to Origin House's 92,000 sq ft. cultivation and production facilities and it's estimated that Cresco will have 87,000 kgs of annualized production within California.
To learn more about Cresco Labs, visit their company HQ here.
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