Cresco Labs Inc. has exited the Arizona market after closing the sale of Encanto, its sole licensed Arizona operation.

The company sold Encanto to an affiliate of Mint Cannabis for an aggregate purchase price of $6.5 million in cash.

“We are pleased to announce the closing of the sale of our remaining Arizona asset,” said Cresco Labs CEO Charles Bachtell. “As we have highlighted over the past several quarters, we are focused on strengthening our operations and increasing profitability by leaning into our core – core markets, core stores, core brands and core products. Our exit from Arizona aligns with our strategy of optimizing our portfolio by prioritizing assets with a greater path to scale.”

Meanwhile, the company also closed on a commercial mortgage secured by three company-owned properties in Ellenville, New York with a principal amount of up to $25.3 million. Approximately $20 million was funded at close, with the remaining principal held to fund future capital expenditures. 

The 10-year mortgage carries an interest rate calculated based on the FHLBank Boston five-year rate plus 375 basis points, resulting in an initial rate at close of 8.43%.

“We are also thrilled to secure a conventional mortgage on our New York real estate at very favorable terms,” Bachtell said. “This non-dilutive financing is another sensible tool for optimizing our balance sheet and lowering our cost of capital as we continue to strengthen our overall business.”