Cresco Labs announced its intentions to acquire Columbia Care for $2 billion in March 2022. The acquisition would have created the largest multi-state operator by pro-forma revenue, then estimated at $1.4 billion.
Charles Bachtell, CEO and co-founder of Cresco Labs, cited “the evolving landscape in the cannabis industry” for terminating the acquisition.
“Moving forward, we remain committed to our Year of the Core strategy, which involves the swift restructuring of low-margin operations, improving competitiveness and driving efficiencies in markets where we maintain leading market share, and scaling operations to prepare for growth catalysts in emerging markets,” he said. “A strong core will enable us to take advantage of the margin accretive, growth opportunities we foresee within this tough economic time for the cannabis industry. While this is not the outcome we originally hoped for, we are confident Cresco Labs is in a stronger position moving forward.”
Nicholas Vita, Columbia Care co-founder and CEO, also pointed to steps the company has taken to improve its performance, such as selling its dispensary and grow facility in downtown Los Angeles and reducing its workforce by 52 while integrating Green Leaf Medical, LLC.
“This is the best path forward for Columbia Care’s employees, customers and shareholders,” he said. “We are thankful for the collaboration and partnership with the Cresco team throughout this extensive process. Over the last 16 months we have reviewed every aspect of our business, remained decisive and have made substantive changes that significantly improved our operations — positioning us with significant strategic and operational strength at this inflection point in the company’s history.”
The companies had extended the deadline to finalize divestiture agreements and obtain required regulatory approvals a couple times, moving it in February from March 31 to June 30. The companies announced at the end of last month it still needed to complete divestitures for regulatory approvals.
Cresco Labs and Columbia Care also reported that plans to sell assets in New York, Illinois and Massachusetts to an entity owned by Sean “Diddy” Combs have fallen through. Originally announced in November 2022, the $185 million transaction would’ve created the largest Black-owned and licensed cannabis compan.