Harvest is a dispensary in Colorado, and they’ve been in business since 2010. Now they’re being acquired by a cannabis conglomerate called the MedMen, and the sale won’t close until later this year. This is a big deal, because the deal will make MedMen one of the largest cannabis companies in the world.
A cannabis startup called Harvest is planning to sell itself to Canadian marijuana giant Canopy Growth. The deal is a $4.8 billion all-stock acquisition that will give Canopy a powerful foothold in the U.S., where a handful of states have legalized recreational cannabis.
Trulieve Cannabis Corp. and Harvest Health & Recreation Inc. are pleased to announce that they have entered into a definitive agreement pursuant to which Trulieve will acquire all of the issued and outstanding subordinate voting, multiple voting and supervoting shares of Harvest. Under the terms of the Agreement, Harvest shareholders will receive 0.1170 of a Trulieve Subordinate Voting Share (each a whole share) for each Harvest Subordinate Voting Share (or its equivalent) held, representing total consideration of approximately $2.1 billion based on the closing price of Trulieve shares on the seventh trading day of the Offering Period. May 2021. Trulieve, a leading multi-state operator specializing in the Northeast and Southeast United States, and Arizona-based Harvest, a leading multi-state operator specializing in the West Coast and Northeast United States, have established deep, vertically integrated operations in their key markets and have become the leading operators in the United States, the largest regulated cannabis market in the world. Upon completion of the transaction and the completion of the previously announced acquisitions of Harvest and Trulieve, the combined company will have a presence in 11 states and include 22 cultivation and processing facilities totaling 3.1 million square feet and 126 retail outlets serving the medical and adult-use recreational cannabis markets. Key points and benefits:
- creating the largest cannabis operator in the United States in terms of retail space and combined cultivation;
- creates the most profitable MSO in the U.S.,, with combined adjusted EBITDA of $266 million1,2 in 2020 and combined adjusted EBITDA3 of $461 million in 2021, providing an unprecedented platform for continued growth;
- offers a superior existing distribution and retail model –has a strong retail network of 126 pharmacies in 11 states, the combined company will have a leading market share in Arizona and Florida ;
- Strong and Growing Presence in Multiple States –strengthens Trulieve’s expansion in the Northeast and Southeast of the U.S. into Florida, Pennsylvania and Maryland, and creates a southwestern hub in key markets like Arizona, where recreational cannabis use by adults was recently legalized ;
- optimizes national presence –has established retail and wholesale channels in all markets, as well as the ability to reach an estimated total addressable market of $19.3 billion by 2025 (Arcview market estimate) ;
- adds premium brands –complements Trulieve’s portfolio of private label and national partner brands with a range of successful products in different form factors;
- utilizing expert operational teams and best practices –of Trulieve and Harvest, improving operational efficiency through a combination of unparalleled expertise and success in applying for state permits and the ability to bring operations to market quickly; and
- Value-CreatingTransaction Strengthens Trulieve’s Financial Performance –reinforces Trulieve’s superior financial performance relative to its competitors, driven by best-in-class margins and strong expected profitable growth.
Today’s announcement is the largest and most exciting acquisition in our industry, creating the most profitable public operator in several states. It is important to note that our companies share the same values for customers and focus on deep penetration of key markets. This merger allows us to build on our strong foundation and create an unparalleled platform for future growth, said Kim Rivers, CEO of Trulieve. Harvest gives us an immediate and significant presence in new and established markets and accelerates our entry into the Arizona adult market. Trulieve and Harvest are leaders in their respective markets, known for their innovation, brand and operational expertise, with real business depth and scale. We look forward to providing patients and clients with world-class care on a broader national scale as we build an iconic brand for cannabis in the United States. We are excited to join Trulieve, which has seen unprecedented success and scale in its home state of Florida, said Steve White, CEO of Harvest. As one of the oldest operators in several states, we believe that our experience in identifying and developing attractive market opportunities, coupled with the recent successful launch of adult distribution in Arizona, will add significant value to the combined business as it continues to develop and grow in the coming years. The transaction will be effected by way of an arrangement with creditors under the Business Corporations Act (British Columbia). Under the terms of the settlement agreement, Trulieve will acquire all of the issued and outstanding Harvest shares, with each Harvest shareholder receiving 0.1170 Trulieve shares for each Harvest share, representing a price per Harvest share of $4.79, representing a premium of 34% over the closing price of the Harvest shares on the seventh trading day. May 2021 means. At the effective time of the transaction, Harvest shareholders will own approximately 26.7% of the pro forma issued and outstanding shares of Trulieve (on a fully diluted basis). The exchange ratio may be adjusted if Harvest completes certain refinancings during the interim period, with the potential adjustment being proportional to the incremental cost of such financing relative to the transaction value. Further details of the transaction will be described in the management information circular and proxy statement (the Circular) to be sent to Harvest shareholders in connection with the special meeting of Harvest shareholders (the Meeting) to be held in the third quarter to approve the transaction. The agreement contains a number of customary provisions, including a commitment not to enter into alternative transactions, the right to negotiate more favorable offers, reciprocal payments of $100 million in certain circumstances and reciprocal expense reimbursement provisions in certain circumstances.
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