Aiming to double the company’s overall store footprint and production capacity, Columbia Care Inc. (NEO: CCHW; OTCQX: CCHWF; FSE: 3LP) just announced a plan to acquire all equity interest as well as affiliates and subsidiaries of The Green Solution.
If completed, the deal will see Columbia Care gain a significant foothold in Colorado with access to more than 20 dispensaries and three indoor grow facilities.
Currently valued at $140 million, the stock and debt deal features a staggered share lockup in place over a one-year period after closing. That valuation includes Columbia Care acquiring $15 million in secured debt as well as the option for an additional $15 million seller’s note to be issued if The Green Solution hits certain milestones by 2021.
The acquisition deal will require approval from state and local Colorado authorities and is expected to close in early 2020 if all regulatory hurdles are overcome.
Discussing the buyout’s announcement this morning, Columbia Care CEO Nicholas Vita commented:
A number of major mergers and acquisitions in the North American cannabis industry are currently in their 30-day waiting periods or have recently been renegotiated as marijuana related stock prices have dropped across the board over the last year.
Buyout deals as a whole have slowed down in recent months in the wake of poor revenue numbers, although expansion is still a priority as cannabis entities struggle to stay afloat.
The recently announced plan for Harvest Health & Recreation, Inc. (CSE: HARV, OTCQX: HRVSF) to snap up Verano Holdings, LLC for instance has shown that not all cannabis acquisition deals are created equal, with value still to be found in expansion efforts even as the industry struggles overall.
In other Columbia Care news, the company’s Q3 2019 financial details were released Nov. 5 via an investor conference call and audio webcast, showing $84.5 million cash on hand and no debt as of the end of September.