Publicly traded New York cannabis firm Columbia Care Inc. is acquiring Green Leaf Medical, a privately held Maryland-based cannabis manufacturer and retailer, for $240 million in cash and stock.
Columbia Care announced Tuesday it has signed a definitive agreement to acquire six-year-old Green Leaf for $45 million in cash and about 44 million common shares of the company making up the balance of $195 million. The acquisition deal is expected to close in the summer of 2021 and is subject to some conditions, including approvals from local cannabis industry regulators. Upon closing, the entire Green Leaf management team will be retained by Columbia Care, and Philip Goldberg, the Maryland firm's CEO and co-founder is expected to join Columbia Care’s board of directors.
Goldberg had previously expressed his desire to take his fast-growing Frederick-based cannabis firm public, or to engage in a merger or acquisition deal that brought the company into the public markets. Green Leaf is backed by about $30 million in funding to date, according to PitchBook. Goldberg did not immediately respond to requests for an interview with Tuesday.
In statements released by Columbia Care, Goldberg said: “Columbia Care is the ideal partner to take Green Leaf through its next phase of growth."
Through the deal, Columbia Care will take control of Green Leaf's three cannabis cultivation facilities and four dispensaries across Pennsylvania, Maryland, Virginia and Ohio. Columbia Care is already one of the largest medical and adult-use cannabis manufacturers and providers, holding existing business licenses in about 15 U.S. jurisdictions and in the European Union. Including Green Leaf's inventory, the company will operate 107 facilities, including 80 dispensaries and 27 cultivation and manufacturing facilities, in total.
Columbia Care sells its shares across several exchanges, including the Canadian Securities Exchange and the Toronto-based NEO Exchange under the ticker symbol "CCHW." It reported an adjusted annual revenue of $78.8 million for fiscal year 2019.
"The acquisition of Green Leaf expands Columbia Care’s operational scale and footprint in four key, limited license markets by materially enhancing the scale and capabilities of its seed-to-sale operations," Columbia Care said in statements Tuesday.
Nicholas Vita, CEO of Columbia Care, noted that Ohio and Pennsylvania are already two of the company's top performing markets by revenue, and this transaction will make Columbia Care one of "the largest, most scaled wholesale and retail operators" in those states. In addition, he stated that in Maryland and Virginia, the Green Leaf deal will allow Columbia Care to "materially expand" its wholesale footprint, retail dispensary network and the scope of its home delivery services.
"No organization in the industry will be better positioned to serve patients and customers in the mid-Atlantic than Columbia Care,” he said in a statement.
Here is how the Green Leaf acquisition will enhance Columbia Care's presence in four states:
In Maryland, Green Leaf operates a 42,000-square-foot growing and processing facility and two operating dispensaries in Frederick and Rockville. The firm is one of the state's largest wholesalers, with its "gLeaf" branded products sold in approximately 44% of the state’s more than 90 operational dispensaries. It also operates a delivery service with a network of 14 vehicles. The acquisition will increase Columbia Care’s immediate Maryland dispensary license count to three, including its existing dispensary in Chevy Chase.
In Pennsylvania, Green Leaf operates a 274,000-square-foot cultivation and processing facility. Its "gLeaf" branded products are sold in approximately 85% of Pennsylvania’s 100 operating dispensaries. The acquisition will grow Columbia Care's existing presence, which includes three operating dispensaries.
In Virginia, Green Leaf operates a 82,000-square-foot cultivation and production facility, a dispensary in Richmond, and offers home delivery across the state with a network of 10 vehicles. The acquisition will expand Columbia Care's existing operations in Southeastern Virginia, which includes a cultivation facility as well as one operating dispensary in the Norfolk area.
In Ohio, Green Leaf operates one retail dispensary. Its acquisition will give Columbia Care control of five Ohio dispensaries in total, the maximum number allowed by a single operator in the state, along with its existing 63,000-square-foot cultivation and production facility.
“Green Leaf has built a fantastic business, and as a result, they have market leading trust and loyalty among the patients and communities they serve," Vita said in a statement. "By leveraging Green Leaf’s legacy and market position, we look forward to continuing the growth, innovation and customer focus that both companies are known for across the industry.”
Canaccord Genuity Corp. is serving as lead financial adviser, and Alliance Global Partners is serving as as co-adviser for Columbia Care in the deal. Foley Hoag LLP is serving as legal counsel to Columbia Care. INFOR Financial Inc. is acting as the exclusive financial adviser and the Dentons cross-border cannabis group is acting as legal counsel to Green Leaf.
