Cresco Labs Poised as New Leader in Cannabis Acquiring Columbia Care

Two leaders in the U.S. cannabis industry have grown closer to finalizing a deal that will make Chicago-based Cresco Labs the nation’s largest multi-state-operator — with pro-forma revenue valued at over $1.4 billion. Through the arrangement, Cresco Labs will acquire Columbia Care of New York — a leading provider of medical cannabis and adult-use products. The companies announced this week obtaining approval from the Supreme Court of British Columbia for Cresco Labs’ acquisition of all issued and outstanding shares of Columbia Care.

The arrangement — first announced in March — won the approval of Columbia Care’s shareholders on July 8, 2022. Their vote followed Columbia Care’s board of directors’ unanimous recommendation to back the merger in March. The transformational deal will combine the companies’ wholesale, retail and operations. Cresco Lab’s strategic footprint will be expanded into the all ten of the nation’s largest and fastest growing markets — representing approximately 55% of the U.S. population and over 70% of addressable cannabis market.

“This final order is yet another milestone achieved towards creating the industry leader in cannabis, and we’re pleased with the forward progress in completing the transformational combination with Cresco,” said Nicholas Vita, co-founder and CEO of Columbia Care.

On the Sunnyside of the street in cannabis sales

Cresco Labs is currently one of the largest vertically integrated multistate cannabis operators in the U.S. Employing a consumer-packaged goods approach, Cresco Labs is the largest wholesaler of branded cannabis products, including Cresco, High Supply, Mindy’s Edibles, Good News, Remedi, Wonder Wellness Co. and FloraCal Farms. Cresco Labs’ Sunnyside retail stores average revenue of $11 million per store, the highest of any scaled national operator in the industry. Cresco Lab’s wholesale platform saw revenue of over $120 million last year, also the highest in the industry.

Cresco Lab’s Sunnyside cannabis stores are the nation’s leaders in sales, average US$11 million per outlet annually. PHOTO COURTESY CRESCO LABS

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Columbia Care holds licenses in 18 U.S. jurisdictions and the EU. The company operates 131 facilities, including 99 dispensaries and 32 cultivation and manufacturing facilities. One of the original multi-state providers of medical cannabis, Columbia Care now serves both the medical and adult-use markets. The company offers products spanning flower, edibles, oils and tablets and manufactures popular brands including Seed & Strain, Triple Seven, gLeaf, Classix, Press, Amber and Platinum Label CBD.

On a pro-forma basis, Cresco Labs expects to have annual revenues in excess of $100 million in 8 different states by 2023, as the combined company increases depth across other markets and diversifies its revenue base. In certain states – namely Florida, Illinois, Maryland, Massachusetts, New York and Ohio – Columbia Care and Cresco Labs will divest assets for regulatory approval prior to close, which is anticipated near the end of 2022.