Chicago-based marijuana company Grassroots Cannabis is being acquired by a Massachusetts competitor for $875 million, the companies announced Wednesday.
Curaleaf Holdings, based in Wakefield, Mass., is purchasing Grassroots in a combination of cash and stock. The deal is expected to close in 2020, pending approval from stockholders and regulators. According to Curaleaf, the combined entities make Curaleaf the world’s largest cannabis company by revenue.
Grassroots, which raised $90 million in March, grows, processes and sells cannabis products. It has a portfolio of 61 dispensary licenses operating across 11 states, and it currently employs more than 400 people. Grassroots has Illinois greenhouses in Deerfield, Moneka, Litchfield and Morris.
The acquisition of Grassroots allows Curaleaf to expand its presence from 12 to 19 states, including Pennsylvania and Illinois, which in June passed legislation to legalize recreational cannabis use on Jan. 1, 2020. The combined companies will have 131 dispensary licenses, 68 operational locations, 20 cultivation sites and 26 processing facilities. The expansion gives the company access to approximately 177 million people.
Curaleaf, founded in 2010, is a publicly traded company, having IPO’d in October 2018, and has a market cap over $3.5 billion.
"Today's announcement is a testament to the hard work of the many employees that helped make Grassroots the leading cannabis company in the Midwest,” said Grassroots co-founder and CEO Mitch Kahn in a statement. “This acquisition will enable us to give our patients and retail partners greater access to products that adhere to the highest standards of quality and reliability, and our employees the opportunity to be part of a best-in-class operator."
Grassroots’ acquisition is just the latest major deal for a Chicago-based cannabis company. Verano Holdings was acquired earlier this year for $850 million after raising $120 million in financing. PharmaCann was acquired by MedMen Enterprises last year for $682 million in stock. Cresco Labs raised more than $200 million before going public in Canada, and Green Thumb Industries also hit the Canadian markets last year.
