As Chicago and Illinois’ marijuana scene heats up, a local cannabis company is being acquired for a hefty price.
Chicago cannabis company Verano Holdings is being acquired for $850 million by Harvest Health & Recreation, a Phoenix-based owner of dispensaries and cultivation facilities in five states.
Verano, which raised $120 million in financing last year, is a holding company that was formed to consolidate the ownership of several cannabis companies. As part of the acquisition deal, Harvest Health & Recreation will have the right to operate Verano’s cultivation facility and dispensaries in Illinois. The deal is expected to close in the first half of this year, pending regulatory approvals.
Following the acquisition, the combined companies are expected to operate 30 dispensaries, eight cultivation facilities and seven manufacturing facilities, with Verano’s Chicago headquarters remaining an operations hub. And by the end of 2019, Harvest says it's slated to grow to more than 70 dispensaries.
“The combination with Verano fits perfectly with our vision of creating the world’s most valuable cannabis company,” said Jason Vedadi, the executive chairman of Harvest, in a statement. “We are confident that this is an opportunity to continue to leverage each of our company’s strengths and drive continued shareholder value, while at the same time achieving the scale we know will give us a leadership position in one of the largest cannabis markets in the world.”
The acquisition comes at a time when Chicago’s marijuana industry is growing, in part due to the support of legalizing cannabis from local politicians, such as Gov. J.B. Pritzker. Additionally, former Illinois governor Bruce Rauner approved a law last year that allows medical marijuana to be prescribed in place of opioid painkillers.
PharmaCann, a Chicago medical cannabis provider, announced it was being acquired by MedMen Enterprises in October for $682 million in stock.
Around the same time, one of Chicago’s largest medical marijuana upstarts Cresco Labs raised $100 million. The company makes smokeable products as well as a line of edibles made by James Beard Award-winning chef Mindy Segal.
