Cannabis multistate operator Curaleaf Holdings signed a definitive agreement to acquire an Arizona-based MSO in a cash and stock transaction currently valued at $286 million.
The acquisition of Tryke Cos., which does business as Reef Dispensaries, will expand Curaleaf’s presence in Arizona, Nevada and Utah.
It comes after Tryke agreed in September 2019 to be acquired by Cresco Labs.
But Cresco, a Chicago-based MSO, pulled out of the $282.5 million purchase in April 2020 because of “regulatory delays, a decline in capital markets and now COVID-19, which brought additional risk to this transaction.”
The Curaleaf-Tryke deal is expected to close in the second half of 2022, contingent on regulatory and other approvals.
Under the terms of the agreement, Massachusetts-based Curaleaf will pay $40 million in cash at closing and $75 million in cash in equal installments on the first, second and third anniversaries of the closing.
Curaleaf also will pay 17 million shares of stock in equal installments on the first, second and third anniversaries.
In addition, 1 million Curaleaf shares will be paid in 2023 based on the business exceeding certain profit targets for 2022.
Tryke, founded in 2014, is a vertical marijuana business that operates in Arizona, Nevada and Utah. It expects to generate $110 million in revenue in 2021.
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The company has two retail stores in Arizona, including Phoenix, and four in Nevada, including two in the Las Vegas area.
Curaleaf said it plans to expand Tryke’s cultivation capacity from 30,000 square feet to more than 80,000 square feet over the next three years.