Columbia Care Stock Jumps On $42.5M Acquisition Of Long Island Greenhouse

Columbia Care, Inc. CCHW CCHW CCHWF 3LP confirmed Thursday it had acquired a 34-acre cultivation facility in New York in a $42.5-million stock-and-cash deal.

What Happened

Under the deal, $15 million will be paid in cash and the remaining $27.5 million in company stock. Columbia Care made an initial payment of $30 million with plans to pay the remaining sum of $12.5 million in stock once the second phase of the transaction is completed in August.

The New York-based company projects it will see its first harvest and sales from this Long Island property during the fourth quarter. 

This facility has approximately 740,000 square feet of operational greenhouse space, which Columbia Care will acquire upon phase two of the transaction, in addition to another 200,000 square feet of accompanying grow capacity.

The greenhouse is ideally located for the company’s distribution needs, which include three NYC and Long Island dispensaries and wholesale distribution to the densely populated New York Metropolitan area, Columbia Care said.

Why It Matters

The new property comes with an additional cultivation and production capacity for the company’s existing Rochester facility, enabling it to add newly-approved factors like cannabis flower.

The company noted that this purchase would help it diversify its activities and push it towards potential social equity business partnerships. Furthermore, the new greenhouse will enable it to open a new medical cannabis production and research hub and support its entrance into the state’s new recreational use program.

 “As a company whose roots are in New York, it has been incredibly important that we build a scalable, vertically-integrated operation in the state,” Nicholas Vita, Columbia Care CEO, said.  

“This is a commitment to our patients, communities, regulators, elected officials and social equity partners that we are here for the long term and intend to be the leaders who define cannabis in New York State – made in New York, by New Yorkers for New Yorkers,” Vita said.

“We are eager to see New York’s regulated market emerge as one of the top global cannabis markets, with some market size estimates exceeding $5B by 2025 and more than 75,000 jobs created by 2027. We intend to continue to invest in opportunities that support this growth for all.”

Price Action

Columbia Care’s shares were trading 3.66% higher at $6.51 per share at last check Thursday.

Photo by Richard T on Unsplash.