One of the United States’ most prominent and significant vertically integrated cannabis operators is ready to make a splash acquisition, one that is going to revolutionize the industry.
Cresco Labs Inc, a company with headquarters in Chicago, Illinois, is set to purchase two Valley marijuana dispensaries, as well as a big growth area that is reportedly 27,000 square-foot of size.
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A Sizable Sum
The company revealed its plans of acquiring Tryke Cos. LLC of Las Vegas on Monday. The pact is expected to be closed for a hefty sum that is hovering around $282.5 million and will be completed sometime in the first half of next year.
Tryke is a prominent actor in the industry, as it currently administrates and owns the Reef Dispensary brand name, which is based in Arizona and Nevada. The firm runs a total of six retail establishments and a couple of growing infrastructures: one in Arizona and the other one in Nevada. Reef Dispensary has two branches in the former state: one in Phoenix and the other in Queen Creek.
Tryke had a quite successful 2018, bringing in a total of $70.4 million in profit on all of its products and offerings. According to Cresco, Tryke is one of the cannabis firms with the most revenue in the United States, and that played a huge rule in its decision to acquire the enterprise. Another driving factor was the existence of Tryke’s high-profit flagship facility with a prime location by the Las Vegas Strip.
Cresco Labs also observed, via the acquisition document, that the two facilities located in Phoenix reported total revenue of $11 million last year.
Charlie Bachtell, the co-founder and Chief Executive Officer of Cresco Labs, detailed that Nevada and Arizona were two expansion targets for quite some time given their high populations and tourism traffic and activity.
Enhanced Growing Opportunities
He also explained that the purchase would let Cresco enjoy six additional retail stores that are very well-located to serve the aforementioned local population and tourists. The deal will also give Cresco enhanced growing opportunities when it comes to cultivation, processing resources, and expansion.
Included in the reported $282.5 acquisition cost is $30 million worth of real estate assets that used to belong to Tryke.
Although the acquisition is instrumental for Cresco’s potential future success, it is not the first dispensary that the firm owns in Phoenix. The company has grown exponentially and now has 25 production infrastructures and 29 retail establishments.