Buy…. Sell ! Cresco’s marijuana asset sales could hit $500 million after Columbia Care deal, analysts say

Buy…. Sell ! Cresco’s marijuana asset sales could hit 0 million after Columbia Care deal, analysts say

MJ Biz report on how Cresco will be dismantled.. Cresco Labs is expected to sell off $250 million-$500 million worth of marijuana cultivation and retail licenses largely to meet state license limits as part of its planned $2 billion acquisition of rival Columbia Care. Company executives told analysts that Chicago-based multistate operator Cresco “will likely” divest assets in Florida, Illinois, Massachusetts, New York and Ohio because of overlapping operations with New York-headquartered Columbia Care in limited-license markets. Investment analysts said it’s also possible Cresco would have to sell some cultivation operations in Maryland and Pennsylvania. But the regulatory requirements in several states, including New York, are unclear, according to analysts. The large-scale asset sale would open opportunities in several high-growth markets for other marijuana companies. The proposed all-stock merger is one of the largest in the cannabis industry and would produce one of the biggest MSOs in the nation, rivaling Curaleaf Holdings and Trulieve Cannabis. The combined footprint of Cresco and Columbia Care currently includes more than 130 retail locations in 17 states and the District of Columbia. That footprint reaches about 55% of the U.S. population. Cresco said a portion of the proceeds from sales would be used to repay existing debt. The company also said the merger would be “accretive,” meaning that it will result in a positive change to the company’s value or profitability. But some analysts say the fact Cresco likely would have to sell so many assets in high-growth markets limits the deal’s upside. Analysts also warned that the Cresco-Columbia Care deal runs higher odds of collapsing than other recent cannabis mergers because of required divestitures, state regulatory approvals, shareholder consent and federal antitrust scrutiny. Given those factors, “we believe it appropriate to call out that this transaction faces a potentially lengthier closing timeline and a higher…

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Source : Buy…. Sell ! Cresco’s marijuana asset sales could hit 0 million after Columbia Care deal, analysts say

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