WAKEFIELD, Mass.–Curaleaf Holdings, Inc. (CSE: CURA / OTCQX: CURLF), a provider of consumer products in cannabis, today signed definitive documents to acquire the Los Sueños Farms and its related entities, the largest outdoor grow in Colorado. This will significantly expand Curaleaf’s Colorado presence, vertically integrating in the state with large-scale outdoor cannabis cultivation. The proposed transaction includes three Pueblo, Colorado outdoor cannabis grow facilities covering 66 acres of cultivation capacity, including land, equipment and licensed operating entities, an 1,800 plant indoor grow and two retail cannabis dispensary locations serving adult use customers.
Total base consideration for the proposed acquisition is approximately $49 million for the Los Sueños operating companies and $18 million for the real estate and farm assets. Total consideration of $67 million to be paid 61% in Curaleaf subordinate voting shares, 29% in cash at closing, and 10% in assumed debt maturing in five years. Additional contingent consideration of up to $8 million in stock will be paid based upon operating cash flow-based targets for 2022.
Boris Jordan, Executive Chairman of Curaleaf, stated, “The acquisition of Los Sueños provides Curaleaf with outdoor cannabis cultivation expertise at commercial scale and establishes our foothold in the $2.2 billion Colorado market. This deal furthers our strategy of constructing low-cost supply chains that will secure healthy margins and position us for interstate commerce when it comes. Ultimately, our goal is to cultivate cannabis at less than $100 per pound, and this acquisition is a significant step in the right direction.”
Today’s announcement complements Curaleaf’s existing Colorado presence through its Select brand. Select is known as America’s #1 cannabis oil brand, with a variety of best-in-class cannabis products distributed to nearly 2,000 locations across 18 states.
Joseph Bayern, CEO of Curaleaf, commented, “The acquisition of Los Sueños will add over 50,000 pounds per year of low-cost wholesale capacity to Curaleaf’s footprint in Colorado, which we intend to double to over 100,000 pounds, representing a significant market share. As the largest producer of biomass in the state, this facility will also fuel the further deployment of our Select product line, which can already be found in 230 independent dispensaries in the state.”
The proposed transaction has been unanimously approved by the Curaleaf board of directors and is expected to close upon regulatory approvals.
Forward Looking Statements
This press release contains forward–looking statements and forward–looking information within the meaning of applicable securities laws. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward–looking statements or information. Generally, forward-looking statements and information may be identified by the use of forward-looking terminology such as “plans”, “expects” or, “proposed”, “is expected”, “intends”, “anticipates”, or “believes”, or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events or results may, could, would, or might occur or be achieved. More particularly and without limitation, this news release contains forward–looking statements and information concerning the proposed acquisition of Los Sueños Farms and its related entities. Such forward-looking statements and information reflect management’s current beliefs and are based on assumptions made by and information currently available to the company with respect to the matter described in this new release. Forward-looking statements involve risks and uncertainties, which are based on current expectations as of the date of this release and subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Additional information about these assumptions and risks and uncertainties is contained under “Risk Factors and Uncertainties” in the Company’s latest annual information form filed April 28, 2021, which is available under the Company’s SEDAR profile at www.sedar.com, and in other filings that the Company has made and may make with applicable securities authorities in the future. Forward-looking statements contained herein are made only as to the date of this press release and we undertake no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law. We caution investors not to place considerable reliance on the forward looking statements contained in this press release. The Canadian Securities Exchange has not reviewed, approved or disapproved the content of this news release.
(This information is primarily sourced from Curaleaf. Highly Capitalized has neither approved nor disapproved the contents of this news release. Read our Disclaimer here).