Chicago-based Cresco Labs is entering the Florida market after inking a deal to acquire VidaCann Ltd, one of the largest providers of medical cannabis in the state.
The purchase consideration is approximately US $120 million and will be comprised of a mix of Cresco Labs shares, which will be subject to a 6 to 12-month lock-up agreement following closing, and cash.
The transaction is anticipated to close during the second quarter and will be subject to customary closing conditions, including approval from the CSE, the Florida Department of Health and all applicable U.S. regulatory agencies.
The deal provides Cresco Labs with a Medical Marijuana Treatment Center license to grow, process, manufacture, distribute and dispense its house of branded products in up to, currently, 30 retail medical dispensaries in the state of Florida.
VidaCann currently operates seven dispensaries in the cities of Bradenton, Deerfield Beach, Holly Hill, Orlando, Palm Bay, St. Petersburg, and Tampa and expects to have 14 dispensaries open by the end of June 2019.
Additional dispensary locations in Tallahassee, Bonita Springs and Port Charlotte are completed and pending operational approval, while locations in Jacksonville, West Palm Beach, Miami and Pensacola are currently under construction and scheduled to open by the end of June 2019.
VidaCann is projected to have up to 20 dispensaries by the end of 2019, while Cresco intends to further accelerate the VidaCann retail dispensary rollout.
In addition, the deal brings Cresco Labs a fully-operational, greenhouse cultivation facility with a cGMP-certified processing and analytical lab, meeting all FDA requirements.
“We look forward to welcoming all of the 100 VidaCann employees to the Cresco Labs family.”
Charlie Bachtell, Cresco Labs (pictured)
Fully operational 70,000 ft2 cultivation and processing facility is scheduled to double in size by the end of 2019 and will allow Cresco Labs to grow and manufacture its full suite of branded products for distribution across Florida.
“Entering the Florida market is consistent with Cresco Labs strategy of entering markets with outsized demand with strong regulatory structures and is an important milestone for the Company that dramatically impacts our growth trajectory and will be accretive to our earnings in 2019,” said Cresco Labs CEO and Co-founder Charlie Bachtell.
“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. VidaCann is the perfect blend of an established operational footprint and infrastructure of professionals that will allow Cresco to execute its disciplined and strategic Florida plan expeditiously.” Bachtell added, “We look forward to welcoming all of the 100 VidaCann employees to the Cresco Labs family.”
“Matching our proven ability to execute operationally with unparalleled speed to the foundation already established by VidaCann, we expect to efficiently scale our Florida operations, immediately impact the market, and get the same high rate of market share that we have achieved in other states in which we operate. We are excited to bring the Cresco Labs’ brand of professional cannabis to the patients of Florida and to all stakeholders involved with this program,” said Cresco Labs President and Co-founder Joe Caltabiano.
According to Arcview Market Research/BDS Analytics, the medical cannabis market in Florida is projected to increase to $1.7 billion by 2022 primarily based on increasing patient count – there are now currently more than 2,000 qualified ordering physicians and nearly 200,000 registered patients (upon 200,000 patients, VidaCann will have the ability to increase its dispensaries to 35) with total medical patients estimated to reach 550,000 by 2022.
Upon the closing of the Transaction, Cresco Labs will have 14 production facilities and 21 retail dispensaries operating with licenses to operate a total of 51 retail dispensaries across 10 states – Illinois, Pennsylvania, Ohio, Nevada, California, Arizona, Florida with New York, Maryland and Massachusetts pending approval. The company’s products are currently on the shelves of over 250 dispensaries.Cannabis Business Worldwide