Cresco Labs (OTCMKTS: CRLBF) has announced the execution of a definitive agreement for the acquisition of 100% of Blair Wellness LLC’s outstanding equity. The acquisition of the Baltimore-based medical cannabis dispensary will close in Q4 2021.
Cresco Labs to acquire Blair Wellness
Charles Bachtell, Cresco Labs co-founder, and CEO said, “We’re pleased to announce the signing of another immediately accretive acquisition in a key U.S. cannabis market. This acquisition of Blair Wellness will represent a step toward building a meaningful, material position for Cresco Labs in Maryland – a state with tremendous growth potential over the coming.”
Bachtell added, “Our retail team consistently demonstrates the efficiency and effectiveness of the Sunnyside operating model, with our stores generating more revenue than respective state averages – Blair Wellness is no different, with revenue consistently higher than double the Maryland state average. As we expand operations across our footprint, we will continue to add high volume dispensaries that drive depth in strategic markets and complement our wholesale operations. We look forward to the incredible Blair Wellness team joining the Cresco Family!”
Maryland market has massive potential
Blair wellness is among Maryland’s top-performing medical cannabis dispensaries, with robust customer/patient retention from over three years in the market. The 6,500 square feet facility is located in downtown Baltimore with proximity to the city’s several universities. Maryland is the 18th most populous state with six million people, and its medical cannabis market is estimated to grow retail sales by $500 million annually.
The Transaction entails a 1.8x revenue multiple in 2021, which will be paid by cash and a 24-month promissory note. The company will execute the transaction on a debt-free, cash-free basis, with a normalized working capital target level that has been jointly agreed upon. The monetary payment would be due upon the Transaction’s completion. The Transaction’s completion is contingent on the approval and receipt of regulatory and needed CSE clearances, among other things.