Benzinga | Oct 14, 2021 10:28AM EDT

Cresco Expands In Pennsylvania Via $80M Acquisition Of Laurel Harvest

Vertically integrated cannabis company Cresco Labs (CSE:CL) (OTCQX:CRLBF) announced Thursday the execution of a definitive agreement to acquire 100% of the outstanding equity interests in Laurel Harvest Labs, LLC, a Pennsylvania clinical registrant, for $80 million.

The transaction is expected to close in the last three months of 2021, according to Chicago-based Cresco.

In addition, Cresco agreed to pay earnouts payable upon achievement of certain post-closing milestones.

What It Means For Cresco

The acquisition includes a newly constructed indoor cultivation facility in Lancaster County, Pennsylvania, allowing for new cultivation capacity, the foundation to expand the facility further, and another strategic point of distribution that is complementary to Cresco Labs' cultivation facility in Brookville.

As part of the deal, Cresco also agreed to acquire the real estate of Laurel Harvest's cultivation facility and Scranton dispensary.

Laurel Harvest Operational Highlights

* Approximately 52,000 sq. ft. of indoor grow/processing space.

* Foundation for an additional 52,000 sq. ft. of indoor cultivation space.

* One operational dispensary in Montgomeryville.

* A second dispensary in Scranton is currently under construction.

* Ability to open an additional four dispensaries throughout the state.

"This acquisition will provide Cresco Labs with immediate incremental cultivation capacity, simplify our ability to expand production capacity further, and add six additional retail dispensary permits in the state," said Charlie Bachtell, CEO of Cresco.

Laurel Harvest Clinical Registrant Highlights

* One of eight original Chapter 20 licenses in Pennsylvania

* Academic clinical research partnership with Lewis Katz School of Medicine at Temple University

* Six ongoing cannabis research studies

Recent News From Cresco:

* Cresco Labs Opens $30M Cannabis Cultivation Facility In Marshall, Michigan's Former Campbell Soup Site

* Cresco Labs Lowers Q4 Revenue Guidance As It Shifts To Owned-Brand Distribution In CA

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

* Cresco Labs Completes $90M Purchase Of Cultivate, Maximizing Massachusetts Footprint

CRLBF Price Action

Cresco shares were trading 2.43% higher at $8.53 Thursday morning.

Photo: Courtesy of Cresco Labs