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  • Post Time Posted May 01, 2019
Curaleaf Holdings Inc., the most valuable U.S. cannabis company, is making a big bet on cannabis oil.

The Massachusetts-based company is buying the regulated cannabis business of Cura Partners Inc., a maker of oil for vape pens, in a stock deal valued at about $1.27 billion (US$950 million). That makes it the largest acquisition so far between U.S. cannabis companies. Cura, based in Portland, Oregon, sells its Select brand cannabis products in more than 900 dispensaries, including in California, which is home to the world’s largest legal cannabis market. It had a revenue of about US$117 million last year.

Acquiring Select gives Curaleaf a popular West Coast brand it can sell at its dispensaries around the U.S., according to Boris Jordan, the company’s chairman.

“I’m buying the biggest brand name in the country - it has a huge following with millenials,” he said in an interview.

A wave of consolidation has hit the American cannabis industry in recent weeks, with large multi-state operators absorbing smaller companies as they race to build a national presence even as cannabis remains illegal at the federal level. Cresco Labs Inc. and Harvest Health & Recreation Inc., two Curaleaf competitors, each announced deals worth more than US$800 million in the last two months.

Most recently, Acreage Holdings Inc., another of the most valuable U.S. cannabis companies, agreed to be acquired by Canada’s Canopy Growth Corp. The US$3.4 billion merger, which would give Canopy access to the lucrative U.S. cannabis market, is contingent on the federal government changing its cannabis laws.

Curaleaf, which has a market value of US$3 billion+, has 44 dispensaries and operates in 12 states, including New York and Massachusetts. Jordan rejected the idea that the company was under pressure to do a deal following the merger action by its competitors. He said he started talking to Cura Partners more than a year ago and was recently able to get it done.

“We’ve broken away from the rest of the industry with this,” he said.

Source: https://www.bnnbloomberg.ca/curaleaf-bets-1-27-billion-on-cannabis-oil-in-largest-u-s-deal-1.1252009  

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