Benzinga | Aug 17, 2021 02:01PM EDT

Cresco Labs To Aquire One Of The 'Top-Performing' Cannabis Dispensaries In Maryland Blair Wellness Center

Cresco Labs (CSE:CL) (OTCQX: CRLBF), the vertically integrated multistate operator, announced the execution of a definitive agreement to acquire 100% of the outstanding equity interests in Blair Wellness, LLC a Baltimore, Maryland medical cannabis dispensary. The transaction, made public on Tuesday, is expected to close in Q4 of 2021.

The Deal Details

The transaction implies a 1.8x 2021 revenue multiple, satisfied through the payment of cash and a twenty-four (24) month promissory note. The transaction will be completed on a cash-free, debt-free basis with a mutually agreed-upon normalized target level of working capital. The cash consideration would be payable upon closing of the Transaction.

What's In It For Cresco?

* One of the top-performing dispensaries in Maryland;

* 6,500 sq. ft. building located minutes from downtown Baltimore and centrally located between the city's numerous universities;

* Strong patient/customer retention from more than three years of operating in the market.

"We're pleased to announce the signing of another immediately accretive acquisition in a key U.S. cannabis market," said Charles Bachtell, Cresco's CEO and co-founder. "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 years. 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."

Maryland Market Highlights

* 18th most populous state in the U.S. with approx. 6 million people;

* Robust medical market growth with annualized retail sales over $500M;

* Constructive commentary from Maryland House and Senate on an adult-use bill in 2022;

Price Action

Cresco shares were trading 3.12% lower at $9.80 per share at the time of writing Tuesday early afternoon

Photo: Courtesy of Cresco Labs