Cresco Labs and Columbia Care Extend Closing Date for $2 Billion Megadeal Amid Regulatory Approvals and Divestiture Concerns.

NEW YORK– Cresco Labs and Columbia Care Inc., the parent company of Sunnyside dispensaries and Cannabist respectively, have agreed to extend the closing date of their $2 billion, all-stock megadeal to June 30, 2023. Despite months of speculation and turbulence in the cannabis industry, the two companies have hinted that the deal remains on. The extension will allow the two more time to finalize accords and obtain certain regulatory approvals needed to close. “We are making good progress on the remaining divestitures and moving closer to completing the Columbia Care Acquisition,” said Cresco Labs CEO Charles Bachtell. “Given the current divestiture and regulatory approvals timeline, we now expect closing to occur sometime before the end of June 2023.”

The deal has faced challenges due to asset sales programs, particularly in New York. According to Viridian Capital Advisors’ director of data analytics, Frank Colombo, “The Diddy deal closing is perhaps the most significant concern as it promises to fund $180 million of cash for debt paydown post-closing… Is it possible that the deal could break over this?” Sean “Diddy” Combes made headlines in December 2022 when he purchased assets from Cresco and Columbia Care for $185 million.

The crash of equity prices has also reduced the likely proceeds from other planned asset sales in Ohio, Maryland, and Florida, raising questions about the marketability of the Empire State’s assets. Nonetheless, both companies have signaled commitment to the deal since the March 2022 announcement. Cresco also said it would provide more updates on the deal during a March 16 investors call before the market opens, when the company reports its fourth quarter and annual financials.