Vertical Companies Acquires UMBRLA Holding Company, Intends to Position Itself As Major Cannabis MSO

Fully integrated cannabis brand Vertical Companies is expanding its reach as a multistate operator with the acquisition of UMBRLA Holding Company and Brands for $462.5 million.

Why It Matters

The acquisition of UMBRLA positions Vertical Companies as one of the largest MSOs in the cannabis industry, Vertical said in a Monday press release. 

UMBRLA is in the process of consolidating several subsidiaries in the space with activity in Arizona, California, Nevada, Oklahoma and Oregon. The companies earned $32 million in 2018, according to Vertical. 

Once merged, the companies are expected to generate $100 million in cannabis revenue in 2019 and $321 million in 2020. The company has plans for cultivation and distribution in Oregon and California and several cannabis brands. in its operations.

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Vertical said it intends to resemble major multinational ventures in the alcohol and food and beverage space.

“Cannabis is the most dynamic growth industry in our lifetime, so there is a lot of room for early entrants to create value," Vertical Chairman Smoke Wallin said in a statement.

"However, just as in the beer, wine and spirits business, scale in distribution and strong brands combined with human talent will separate the true leaders from the rest of the market." 

What’s Next

The acquisition is expected to close by the end of July; Vertical then plans to go public on the Canadian Stock Exchange via a reverse takeover. Before the RTO, the company  said it will launch a capital raise to expand operations and other business activity.

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