CHICAGO & JACKSONVILLE, Fla.--(BUSINESS WIRE)--
Cresco
Labs Inc. (“Cresco Labs” or the “Company”) (CSE: CL) (OTCQX: CRLBF),
one of the largest vertically integrated multistate cannabis operators
in the United States, today announced that it is entering the Florida
market through the signing of a letter agreement to acquire the
ownership interests or assets of VidaCann Ltd. and/or affiliated
entities (“VidaCann”), one of the largest and most advanced providers of
medical cannabis in Florida (the “Transaction”).
Key Transaction Highlights and Benefits:
-
Vertically Integrated Florida License – Provides Cresco Labs a
Medical Marijuana Treatment Center license to grow, process,
manufacture, distribute and dispense the Company’s house of branded
products in up to, currently, 30 retail medical dispensaries in the
state of Florida.
-
Retail Dispensary Footprint & Rollout – VidaCann currently
operates seven (7) 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, and
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. Dispensary locations are strategically
located throughout the state to ensure 95% of the population of
Florida is within 50 miles of a VidaCann dispensary. Delivery is
available statewide to all licensed patients.
-
Operational Cultivation and Processing – A fully-operational,
greenhouse cultivation facility with a state-of-the-art cGMP-certified
processing and analytical lab, meeting all FDA requirements.
-
Fully operational 70,000 ft2 cultivation and processing
facility is scheduled to double in size by the end of 2019and
will allow Cresco Labs to grow and manufacture its full suite of
branded products for distribution across the state.
-
The greenhouse maintains more than 30 premium strains and VidaCann
is the only Florida cannabis company using custom-made Italian
extractors that can process over 400 pounds a day.
Management Commentary:
“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.
Florida Market:
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. With a population of approximately
21 million, the Florida market will increase Cresco Labs’ total
addressable consumer base to more than 140 million people.
Cresco Labs Footprint:
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. Cresco Labs is
operational in six of the seven most populated states in the country and
has more than 140 million potential consumers which is 65% of the
estimated total addressable US cannabis market.
Transaction Details:
The purchase consideration is approximately $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 final
purchase price and proportion of cash and stock to be determined and
reflected in the definitive agreement.
Completion of due diligence and execution of a definitive transaction
agreement is expected within two weeks. 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.
VidaCann has been operational since 2018 and their year-end financials
have not yet been finalized.
Other:
Canaccord Genuity Corp. is acting as financial advisor to Cresco Labs
and Bennett Jones is acting as Canadian legal advisor.
About Cresco Labs:
Cresco Labs, based in Chicago, is a leading U.S. cannabis company with
experienced management, access to capital and a demonstrated growth
strategy. As a differentiated grower, processor and retailer of premium
cannabis operating in ten states, the company focuses on entering highly
regulated markets with outsized demand potential and high barriers to
entry. Its impressive speed-to-market gives Cresco a distinct
competitive advantage as it replicates its model to expand its national
footprint. Cresco’s proven ability to execute is complemented by a
cutting-edge brand strategy spearheaded by several of the brightest
minds in consumer marketing in the nation. Cresco’s products are
tailored to all major consumer segments: everyday cannabis, medicinally
focused, connoisseur grade, and chef inspired edibles by James Beard
Award-winning pastry chef Mindy Segal. Learn more about Cresco Labs at crescolabs.com.
Forward Looking Statements
This press release contains “forward-looking information” within the
meaning of applicable Canadian securities legislation and may also
contain statements that may constitute "forward-looking statements"
within the meaning of the safe harbor provisions of the United States
Private Securities Litigation Reform Act of 1995. Such forward-looking
information and forward-looking statements are not representative of
historical facts or information or current condition, but instead
represent only the Company's beliefs regarding future events, plans or
objectives, many of which, by their nature, are inherently uncertain and
outside of the Company's control. Generally, such forward-looking
information or forward-looking statements can be identified by the use
of forward-looking terminology such as, ‘may,’ ‘will,’ ‘should,’
‘could,’ ‘would,’ ‘expects,’ ‘plans,’ ‘anticipates,’ ‘believes,’
‘estimates,’ ‘projects,’ ‘predicts,’ ‘potential’ or ‘continue’ or the
negative of those forms or other comparable terms. The Company’s
forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the Company’s actual
results, performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by the
forward-looking statements, including but not limited to those risks
discussed under "Risk Factors" in the company’s CSE Listing Statement
filed with SEDAR; and other factors, many of which are beyond the
control of the Company. Readers are cautioned that the foregoing list of
factors is not exhaustive. Because of these uncertainties, you should
not place undue reliance on the Company’s forward-looking statements. No
assurances are given as to the future trading price or trading volumes
of Cresco’s shares, nor as to the Company’s financial performance in
future financial periods. The Company does not intend to update any of
these factors or to publicly announce the result of any revisions to any
of the Company’s forward-looking statements contained herein, whether as
a result of new information, any future event or otherwise. Except as
otherwise indicated, this press release speaks as of the date hereof.
The distribution of this press release does not imply that there has
been no change in the affairs of the Company after the date hereof or
create any duty or commitment to update or supplement any information
provided in this press release or otherwise.
View source version on businesswire.com:
https://www.businesswire.com/news/home/20190318005225/en/
Media:
Jason Erkes, Cresco Labs
Chief Communications
Officer
press@crescolabs.com
Investors:
Aaron Miles, Cresco Labs
Vice President,
Investor Relations
investors@crescolabs.com
For general Cresco Labs inquiries:
312-929-0993
info@crescolabs.com
Source: Cresco Labs Inc.