While many investors see (or at least saw) the Canadian cannabis market as a potential staging point for American companies to expand, an equal argument can be made for the inverse.
Many Canadian cannabis companies are looking to expands southwards into an area that many feel to be a more mature, stable cannabis sector without much of the instability that has come from Canada’s poorly implemented legalization. Acreage Holdings Inc (CSE: ACRG.U), an American company that’s listed on the Canadian Stock Exchange, announced today that it had completed the acquisition of a major Florida-based operator, Nature’s Way Nursery.
The Miami-based company was purchased in a $67 million transaction, $63 million of which is payable in cash and $10 million of that sum had previously been escrowed back in November when both parties signed the initial transaction agreement. The remaining $4 million will be paid in shares of an Acreage subsidiary, High Street Capital Partners.
“The combination of policy and demographics in Florida makes it one of the largest growth cannabis markets in the U.S. and we could not be more pleased to close this deal,” said Acreage CEO Kevin Murphy. “With the fourth largest population in the U.S. Florida is expected to quickly become the fifth largest cannabis market with an estimated $1.1 billion in retail cannabis sales by 2022, according to Arcview Market Research.”
Natures way holds over 30 medical cannabis dispensaries in Florida along with necessary operating licenses to cultivate and process marijuana. The south-eastern state is considered a major medical cannabis market, with the Florida Department of Health Office of Medical Marijuana use revealing that as of the end of December, there were around 209,000 patients in the state. In comparison, the state of New York took two and a half years to get to 60,000 patients, which is especially impressive when considering Florida’s medical marijuana program isn’t the laxest by any means.
According to Cannabis Business Times, the Florida market is poised to begin taking steps to possibly legalizing recreational use in the coming weeks. As Gov.-elect Ron DeSantis takes office next week, two upcoming court appeals hold the potential of making a recreational marijuana push in 2020 not only highly possible, but probably.
Acreage Holdings has been expanding to other states as well. Just last month, the company announced they opened a new cannabis dispensary brand in Massachusetts as well. In response to todays news, however, stock prices shot up a respectable 9.2 percent in today’s trading session.
In comparison, the Dow Jones increased only 3.2 percent itself, with other major cannabis companies like Tilray (NASDAQ: TLRY) and Aurora Cannabis (TSE: ACB)(NYSE: ACB) stayed relatively the same.
Acreage Holdings Company Profile
Headquartered in New York City, Acreage is the largest vertically integrated, multi-state owner of cannabis licenses and assets in the U.S. with respect to the number of states in which it is licensed to operate. With operating licenses in 19 states, Acreage serves a population of more than 172 million Americans and an estimated 2022 total addressable market of approximately $14 billion in legal cannabis sales, according to Arcview Market Research. Acreage is dedicated to building and scaling operations to create a seamless, consumer-focused branded cannabis experience. –Acreage Holdings