Harvest Health & Recreation (TSE: HARV) announced today that it’s planning to acquire Verano. The transaction, estimated at around $850 million, would mark one of the largest U.S. cannabis consolidations in the country’s history, which will also give the company the right to own 200 facilities across 16 different states.
“This is a natural match between like-minded entrepreneurs who have built our companies from the initial facilities into two of the largest MSOs in the U.S, with an unwavering focus on operational excellence, superior quality products and service, and delivering value to customers and shareholders,” said Verano Co-founder and CEO George Archos. “Our growth and unique positioning in key markets allowed us to evaluate some of the largest players in the space, but we only had one unanimous choice for a major transaction and that was Harvest.”
The all-stock transaction is based on a share price of C$8.79 and would see Harvest gain licenses to operate in 11 new states, acquire seven cultivation facilities, 37 retail licenses, as well as a market of 150 million Americans previously out of the company’s retail reach.
“From day one, we have operated as a fundamentally sound business focused on consistent revenue and profit growth. We are excited to bring Verano’s premium brands and operations into Harvest,” added Harvest CEO Steve White. “We have the unique opportunity to create truly national brands by deploying these products within the future combined footprint of states and dispensaries. Most importantly, we share the same mission as one new company to improve people’s lives through the goodness of cannabis.”
Overall, investor interest has slowly been moving away from Canada, where the entire country has already legalized cannabis, to the U.S., where there are still untapped markets where cannabis remains illegal. Overall, legal cannabis consumer spending in the U.S. is expected to reach $22.2 billion over three years, in comparison to Canadian forecasts estimated at only $5.9 billion, according to Bloomberg.
In response to the news, shares of Harvest Health increased 10.6 percent, jumping to C$9.5 per share by the end of today’s trading session.
Harvest Health & Recreation Company Profile
Harvest Health & Recreation Inc. is one of the first consistently profitable, vertically integrated cannabis companies with one of the largest footprints in the U.S. Harvest’s complete vertical solution includes industry-leading cultivation, manufacturing, and retail facilities, construction, real estate, technology, operational, and brand building expertise — leveraging in-house legal, HR and marketing teams, along with proven experts in writing and winning state-based applications.
The company has more than 625 employees with proven experience, expertise and knowledge of in-house best practices that are drawn upon whenever Harvest enters new markets. Harvest’s executive team is comprised of leaders in finance, compliance, real estate and operations. Since its founding in 2011, Harvest has grown its footprint every year, has been ranked as the third largest cultivator in the U.S. and currently owns licenses for more than 140 facilities across the U.S. Harvest shares timely updates and releases as part of its regular course of business with the media and the interested public. – Harvest Inc
Verano Holdings Company Profile
Verano™ is a national, vertically integrated operator of licensed cannabis cultivation, manufacturing and retail facilities dedicated to improving lives by providing safe access to effective pesticide-free marijuana products that profoundly impact the communities it serves. Verano develops and produces a well-rounded suite of limited edition, lifestyle cannabis products, which offer superior medicinal therapies and inspirational product options. – Verano Holdings