In a press release today, Harvest Health & Recreation, Inc. – a vertically integrated multistate cannabis dispensary operator, announced that it would be acquiring privately held Verano Holdings for $850 million in an all-stock deal.
The deal surpasses the previous record for an U.S. acquisition in the cannabis industry – when in October 2018, MedMen Enterprises acquired multistate medical marijuana company PharmaCann in an all-stock deal valued at $682 million.
The deal is expected to be completed in the first half of this year, giving Harvest one of the largest footprints among multistate cannabis operators with 30 operating dispensaries, eight cultivation facilities, and seven manufacturing facilities upon completion.
“The resulting company will enjoy tremendous scales of economy and embodies the concept of 'one plus one equals three,'” said Jason Vedadi, Executive Chairman of Harvest pic.twitter.com/yrLCa0W1BV
— verano.holdings (@veranoholdings) March 14, 2019
By the end of 2019, the combined business should have 70 open dispensaries, 13 grow farms and 13 manufacturing facilities. Harvest and Verano have nearly 200 licenses between them already – spanning 16 states. This means the combined company could have a total of 123 dispensaries. There is no other company in the U.S. with that many licenses.
“The acquisition is the next step in Harvest becoming the largest cannabis company in the world,” Harvest CEO Steve White said during an investor conference call.
Details of the management team following the deal’s closure are still being worked on, said White. “This really is a group of non-ego-based individuals, and we are working through that as we speak,” he added.
Harvest also trades on the Canadian Securities Exchange as HARV. Harvest is also one of the very few dispensary operators to currently be profitable on an operating and EBITDA (earnings before interest, taxes, depreciation, and amortization) basis.
