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What Curaleafs record $ 950 million deal says about US cannabis consolidation




<p class = "canvas-atomic text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Wednesday, Curaleaf CEO Joe Lusardi & nbsp; was the largest agreement between two US cannabis companies as one that unified two market-leading brands on the east and west coast to create a nationally leading cannabis power plant, data-reactid = "15"> On Wednesday, Curileaf's CEO Joe Lusardi ran the largest The agreement between two US cannabis companies as one that unified two market-leading brands on the east and west coasts to create a nationally leading cannabis power plant 1[ads1]9659002] But the nearly $ 950 million deal bringing Cura Partners & # 39; Select brand products under the Curaleaf umbrella , is unique in more than just scale.

<p class = "canvas-textile-textile Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "I unlike the second latest banner cannabis acquisition, where "Canada Canopy Growth" agreed to acquire New York -based Acreage Holdings to access the company's 20 US state licenses and much larger US markets, Curaleaf's agreement was set out to specifically acquire the most popular cannabis oil brand in California, Nevada and Oregon. "data-reactid =" 17 "> Unlike the second banner cannabis acquisition, where Canada's Canopy Growth agreed to acquire New York-based stock holdings to access its 20 US state licenses and much larger US market, Curaleafs agreement from a desire to specifically acquire the most popular cannabis oil brand in California, Nevada and Oregon.

Furthermore, the agreement combines a brand that focused on well-being in Curaleaf with a more lifestyle-focused brand in Select, producing cannabis oil for waxing, lotions and When asked in an interview with Yahoo Finance's YFi PM, if the cannabis branding consolidation trend is likely to continue, Lusardi replied, "Without a doubt,"

"If you look at Curaleaf, we are a mono-branded strategy, "he said." Our company was about building a Curaleaf brand because that is where we believe long-term value will be, and now we have gathered the two biggest brands in cannabis and we are very happy to deliver it to all segments of the cannabis user. "

At 4% market share, Elixinol is the fifth largest CBD company.

Apart from combining two popular brands, Lusardi hopes that synergy will lead to cost-effectiveness, including a 25% reduction in process costs and a 50% reduction in Selects The combined unit also boasts 15 state licenses, which would only be a shy of the number that Harvest Health & Recreation contained after the March merger with Verano Holdings, while Acreage Holdings will still have the largest number of state licenses at 20.

<p class = "canvas-textile text-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Acreage CEO Kevin Murphy predicted other multistate operators can continue to consolidate "Trying to catch up with ." Not all cannabis companies today have to exist and they will not exist, "he said." data-response time = "32"> Acreage CEO Kevin Murphy predicted other multistate operators can Keep looking to consolidate to try to catch up. "Not all cannabis companies today need to exist, and they won't exist," he said.

With a complaint to another international company that wants to follow Canopy's management to gain access to the US market, a domestic company is increasing its number of state licenses can make it easy to stand out. Despite that fact, Lusardi said it was not the core evaluation in his own agreement.

"We believe that the United States is the best cannabis market in the world, and it will be the fastest growing and so we do a strategy of being the largest company in our own home market," he says. people who buy us or any other strategy, but run out on what we are trying to do, which is the most successful cannabis company in the United States. "

Sell CBD Products

Interesting, as industry expert and Brightfield Group CEO Bethany Gomez notes, both companies also recently had inked deals with major reseller CVS, If several national dealers are to follow to sell CBD products in several states, such as Walgreens and RiteAid, she predicts that companies with strong consumer-friendly brands will be even more desirable.

"This is an interesting deal because it is not just a multistate operator acquiring another multistate operator to grow retail foothold in new states," she said. Ultimate operators have "mainly focused on getting into as many states as possible, and often branding is almost an afterthought. This indicates a shift in it, and I expect more offers like this over the next 12 months. "



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