Cresco Labs Wraps Up $80M Acquisition Of PA-Based Laurel Harvest, Boosting Cannabis Cultivation

Vertically integrated cannabis company Cresco Labs CL CRLBF reported Friday that it has closed its previously announced acquisition of Laurel Harvest Labs, LLC.

What Happened?

The Chicago-based company purchased 100% of the outstanding equity interests in Laurel Harvest Labs, a Pennsylvania clinical registrant, for $80 million.

Cresco also agreed to pay earnouts upon achievement of certain post-closing milestones.

What It Means For Cresco

The acquisition brings roughly 52,000 square feet of indoor cannabis grow and processing capacity to Cresco, with an option to double the cultivation space.

The deal also includes one operational dispensary in Montgomeryville, a second dispensary in Scranton that is currently under construction, as well as the ability to open an additional four dispensaries throughout the state.

"Between the acquisition of Laurel Harvest and the previously closed Cure Penn acquisition, we are executing our strategy of strategic breadth and depth, focused on the most important states, and positioning ourselves to capitalize on the eventual expansion of the cannabis program in Pennsylvania," Charlie Bachtell, Cresco Labs' CEO and co-founder said.

Laurel Harvest is a holder of one of eight original Chapter 20 licenses in Pennsylvania. The company has teamed up with Lewis Katz School of Medicine at Temple University and is currently involved in six ongoing cannabis research studies.

What's Next?

Bachtell said that maximizing retail presence is imperative for Cresco, as well as adding a second cultivation facility to "optimize the product, quality, assortment and accessibility, and maintain the number one wholesale market share in the state.

"We are tailoring our strategy to the unique dynamics of each state to maintain our leading market position and increase profitability," he added.

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CRLBF Price Action

Cresco's shares traded 3.08% lower at $7.88 per share at the market close on Thursday.

Photo: Courtesy of Cresco Labs