Benzinga | Sep 23, 2021 10:37AM EDT

Cresco's Stock Up On Acquisition Announcement Of Three Philly-Based Cure Penn Cannabis Dispensaries

Vertically integrated cannabis company Cresco Labs Inc. (CSE:CL) (OTCQX:CRLBF) has signed a definitive agreement to acquire three operational Cure Penn dispensaries in Lancaster, Phoenixville and Philadelphia, PA.

Deal Details

Under the terms of the agreement, the Chicago-based company is purchasing 100% of the outstanding equity interests in Bay, LLC, which is doing business as Pennsylvania, for $90 million in cash and stock.

The transaction is expected to close in the fourth quarter of 2021, or once all required CSE and regulatory approvals are obtained.

What It Means For Cresco?

Charlie Bachtell, CEO and co-founder of Cresco Labs, said Thursday that the acquisition is bolstering the company's retail footprint in Pennsylvania, as well as increasing profitability

and strengthening its wholesale leadership position in the state.

"The Cure Penn team has developed a high-performing retail platform across three dispensaries that sets up another immediately accretive acquisition for Cresco Labs," Bachtell added.

What's Next?

The company noted that Cure Penn dispensary locations would be incremental and complementary to its four existing Sunnyside dispensaries in Pennsylvania.

Moreover, Cresco expects that the greater operating platform will outperform the average revenues per store in Pennsylvania.

Cresco's Recent Moves And Operational Highlights

After revealing that its second-quarter financial results mid-August with revenue of $210 million, up by 17.7% from the previous quarter and 122.8% year-over-year, Cresco 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.

Shortly after, in September, the company wrapped up the $90 million purchase of Cultivate, which included roughly 42,000 square feet of active flowering canopy and three operational stores in Leicester, Framingham and Worcester, Massachusetts.

Price Action

Cresco's shares traded 3.82% higher at $8.96 per share at the time of writing, Thursday morning.

Photo: Courtesy of Cresco Labs Inc.