Cannabis MSO Cresco expands in Massachusetts via $90M acquisition

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Chicago-based cannabis multistate operator Cresco Labs is spending $90 million to acquire all the outstanding equity interests of vertically integrated Massachusetts operator Cultivate.

According to a news release, Cresco is paying $15 million in cash and $75 million in stock for Cultivate – plus potentially up to another $68 million in earnouts if certain financial targets are met.

The deal is expected to close in the fourth quarter of 2021.

Cultivate, the collective name for Cultivate Licensing and BL Real Estate, has about 42,000 square feet of flowering canopy and plans to add another 20,000 square feet.

The company also has two operational dispensaries, in Framingham and Leicester, and a third is expected to open in the second quarter of this year.

When Cultivate’s cultivation expansion is complete, the combined operations will include 100,000 square feet of active canopy, three adult-use stores and three medical cannabis dispensaries.

Before acquiring Cultivate, Cresco’s only Massachusetts location was in Fall River.

“This will also mark the fourth state in which we operate the maximum number of retail stores,” Cresco CEO Charlie Bachtell said in a statement.

Cresco has a footprint in five other states – Arizona, Illinois, New York, Ohio and Pennsylvania.