Cresco Labs, one of the largest cannabis-related companies in the United States, announced that it is planning to go public in the Canadian market; a move that will open it up to additional funds and clients in a bid to expand their existing operations.
The company announced that it entered into a reverse takeover agreement with Vancouver-based metals and mining company Randsburg International Gold Corp (CVE: RGZ.H), which will effectively result in a merger between the two entities.
In a reverse takeover agreement, a private company goes public through buying enough shares in an already public company to take control of it, in which shareholders then exchange their current holdings for shares in the public company. The deal remains subject to shareholder and regulatory approval as well as other conditions, but experts expect the process to be completed by the end of 2018.
If so, Cresco Labs will become the second Illinois-based cannabis company to go public in the Canadian market through a reverse takeover of another shell company. The first being Green Thumb Industries (CNSX: GTII) which went public through a reverse takeover before trading publicly on the Canadian Securities Exchange.
“The Canadian market has been very supportive of U.S. – based cannabis companies, and we look forward to having expanded access to capital that will help us accelerate our strategic growth plan. We believe Cresco Labs has a compelling investment story for institutional and retail investors looking to participate in the dynamic growth of the cannabis industry,” said Cresco Labs CEO Charles Bachtell.
Cresco operates three cultivation facilities in Illinois and recently completed an expansion of its primary facility to more than double its cannabis growth output. Additionally, the company has licenses to operate in Ohio and Pennsylvania as well as having auxiliary operations in California, Nevada, and Arizona.
The news follows a recent announcement on October 5th where Cresco Labs raised over $100 million in private funding to help facilitate future expansions. “The needs that are placed on a company like Cresco are pretty significant, so we need to make sure we’ve got the resources in place to continue to be able to scale the company,” said Bachtell at the time, adding that the funding was necessary to establish the dominant brand presence they intend to achieve. “The financial commitments we secured for this round represent both how appealing the cannabis industry has become to investors and how impressed they are with the direction Cresco is headed.”
As major U.S. cannabis producers continue to secure funding from eager investors, taking hold of the Canadian market seems like an appealing move for many decision makers in the industry.
Cresco Labs Company Overview
Recently being named to Entrepreneur Magazine’s 100 Cannabis Leaders list, Cresco Labs currently operates in six states, giving the company one of the largest consumer footprint of any U.S.-based cannabis company.
Their brands; Cresco, Remedi, Reserve and Mindy’s Edibles, an infused edible line with James Beard Award-winning Chef Mindy Segal, provide a full suite of consistently dosed products.
These products cater to all consumers, from the novice to connoisseur, from the medically-minded to the recreational user. The company has a core value of educating consumers while trying to eliminate the stigma associated with marijuana. – Cresco Labs