Cresco Labs Buys its Way into Florida Cannabis Market
On Monday (March 18), the emerging MSO confirmed its pursuit of medical-only market in Florida, which is estimated to reach a value of US$1.7 billion in 2022 by the Arcview Market Research and BDS Analytics.
The acquisition of VidaCann will cost Cresco Labs approximately $120 million in an undisclosed mix of cash and shares of the company. The shares will be part of a lock up that can last between six and 12 months.
However, final numbers will be revealed as part of the final agreement.
“Since relaunching its cannabis program in 2017, Florida has seen tremendous growth in patient registration and is one of the most important markets in the country,” Charlie Bachtell, CEO and co-founder of Cresco Labs, said in a press release.
As part of VidaCann’s portfolio, Cresco Labs will be securing seven currently active dispensaries in the state. VidaCann’s plans include three completed dispensaries missing operational approval and four stores under construction set to open by June.
Among one of the currently under construction stores in VidaCann’s pipeline, there includes a store located in Miami.
If the transaction in Florida is completed, Cresco Labs will have a presence in Illinois, Pennsylvania, Ohio, Nevada, California, Arizona. The MSO is awaiting approval for its market share in Maryland and Massachusetts.
The acquisition will also grant Cresco Labs with the operation of VidaCann’s house of branded products which, according to the MSO, are sold in 30 retail dispensaries in Florida presently.
On Monday shares of Cresco finished with a price of C$12.36, representing a 6.37 percent increase for the day.
Kim Rivers, CEO of Trulieve Cannabis (CSE:TRUL,OTC Pink:TCNNF), told the audience at the Canaccord “Growth Investor Day” she expects to see the issue of adult-use legalization addressed until the 2024 elections.
During the same event, the management team of Cresco indicated in its perspective Pennsylvania and Florida were the fastest growing medical markets in the US.
At the time, the company confirmed its “laser-focus” interest in Florida.
Despite the lack of a legal recreational market, analysts in the space agree Florida is one of the most attractive states in the US to follow for investors.
“The state is in the early stages of adoption and we believe will continue to support strong growth metrics as the medical program continues to evolve,” Neal Gilmer, analyst with Haywood Securities wrote in a research note.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
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