A Phoenix-based marijuana company pays $ 850 million for Chicago-based cannabis operator Verano Holdings, in an effort to enter Illinois, considering legalization of recreational reeds.
The agreement gives Harvest Health & Recreation the right to operate Verano's cultivation plant and dispensaries in Illinois, as well as operations in other states. Verano's Chicago headquarters are expected to remain an operating hub as a result of the acquisition.
Harvest Health, which owns five state dispensers or cultivation plants and trades in the Canadian securities exchange, has long seen an entry into Illinois CEO Steve White. Illinois is an attractive market because it is a heavily populated state, and lawmakers prepare a bill to legalize adult marijuana, he said.
"We wanted to make sure we participated in a meaningful way before these conversations were on a crescendo," White said. "When the conversation begins to progress, the price of assets in Illinois goes up."
The agreement is pending approvals from the authorities and is expected to close in the first half of this year. The combined company will operate 30 dispensaries, eight cultivation plants and seven production facilities around the country.
Verano was formed last year as a holding company that consolidated ownership of several cannabis operations. In October, it raised $ 1
Its cultivation plant in downstate Albion is in the process of being expanded to double its growth capacity, said Sam Dorf, Verano. It also has dispensaries in the Norwood Park East area and west suburb of St. Charles, and has a stake in a dispensary in Effingham.
The company employs more than 350 people, of which 140 are in Illinois. That figure is expected to continue to grow, Dorf said.
While Verano's operations in Illinois and other states were tantalizing for Harvest, it was Harvest's reach in Arizona and California that appealed to Verano.
"This gives us great access now to all the western areas of the United States," Dorf said.
Illinois pot companies are making huge strides in establishing themselves as the nation's marijuana industry, warming up. Last year, two companies were debuted on a Canadian stock exchange, and another company is to be bought for nearly $ 700 million.
Consolidation is becoming increasingly common as cannabis companies that have not won licenses in state medical or recreational marijuana programs to buy into. White said Verano won licenses in the states Harvest lost in, and vice versa.
"The way American cannabis develops, we are in the Greek phase of that development," White said. "There are two ways to obtain licenses. You must essentially do both to win land grabs." @AllyMarotti