CGC Acquisition why?
Like TLRY, CGC is desperate to change the narrative around the future of the company. Canopy Growth announced its plan to buy Wana Brands, the "#1 edibles brand in North America". Shares of CGC traded up 7% yesterday after the announcement but ended up 3% on the day. CGC has signed a definitive agreement to acquire 100% of Wana brands when US legalization occurs for 7-10x revenues. Wana manufactures and sells gummies in Colorado, California, Arizona, Illinois, Michigan, and Florida. They also currently operate in these twelve states and Canada. Only USD 297.5 Million buys CGC a call option to acquire 100% of Wana when and if legalization occurs. Upon exercising the option, CGC will pay 15% of Wana's fair market value. Until the option is exercised, CGC will have no voting or economic interest in the company.
CRLBF Acquisition
As legalization talks heat up in Pennsylvania, Cresco has been expanding its presence in the state. Cresco recently announced the acquisition of Laurel Harvest Labs, which owns three facilities in the state. Two of the locations are retail dispensaries, while the other is a cultivation operation. The cultivation facility is 52,000 Sq. Ft. with land available to double its size. One of the dispensaries is fully functional, while the other is still under construction. The total consideration is equal to $80 Million and is expected to close in Q4 2021. What is unique about Laurel Harvest is that they own Chapter 20 clinical registrant licenses in the state, which allows them to conduct cannabis research with their partner of Temple University. "As the medical market continues to grow and as legislators develop plans for adult use, we are increasing our depth in the key state of Pennsylvania to strengthen our wholesale leadership while growing profitability and scale through new retail. This acquisition will provide Cresco Labs with immediate incremental cultivation capacity, simplify our ability to expand production capacity further, and add six additional retail dispensary permits in the state," said Charlie Bachtell, CEO of Cresco Labs.
ME Tracker
The rollout of recreational sales in Maine began to slow for the first month in September. Sales were down 3.9% from sequentially to $9.7 Million. The annual run rate based off the past three months is $117 Million while our estimates show a mature adult-use market having $340 Million. The large discrepancy shows the poor rollout and low demand for recreational sales in Maine.
