Marijuana Business Magazine November-December 2019

Marijuana Business Magazine | November-December 2019 26 Recent deals, acquisitions and other announcements from North American cannabis companies By Omar Sacirbey Cresco Expands in Illinois and Southwest Chicago-based Cresco Labs bought Tryke , a vertically integrated private cannabis company active in Nevada and Arizona, for $282.5 million, a price tag made up of $55 million in cash and the balance in stock. Tryke, which posted revenue of $70.4 million in fiscal year 2018, owns the Reef Dispensaries brand, which includes six stores in Las Vegas and Phoenix. Cultivation facilities in Nevada and Arizona also are part of the deal. The acquisition means Cresco, a major multistate cannabis operator, will gain access to the Utah market, where Tryke possesses one of only eight cultivation licenses. Cresco said it expects the deal to close in the first half of 2020, noting that it will likely be subject to U.S. Department of Justice scrutiny under Hart-Scott-Rodino antitrust measures. Cresco trades on the Canadian Securities Exchange as CL. Cresco also will sell two cultivation and processing facilities in Illinois to Innovative Industrial Properties , a real estate investment trust company (REIT), for $46.3 million as the multistate operator prepares for a “significant increase in demand” when recreational marijuana sales become legal in the state Jan. 1. The facilities, which will continue to be operated by Cresco under a lease arrangement, are in Joliet and Kankakee and total about 100,000 square feet. Some of the pro- ceeds from the sale will be used to expand cultivation and retail facilities in preparation for when adult-use marijuana becomes legal, Cresco said. Innovative Deal Innovative Industrial Properties , a REIT focused on the cannabis industry, bought a warehouse in Michigan from LivWell Holdings in a $42 million sales-leaseback deal. San Diego-based Innovative Industrial paid $19 million to LivWell Michigan for the 156,000-square-foot warehouse in Warren, Michigan. LivWell Michigan, whose parent is Denver-based LivWell Holdings, will pay up to $23 million in tenant improvements on the property, which will be reimbursed by Innovative Industrial, driving the final price tag up to $42 million. The warehouse will be operated as a cannabis cultivation and processing operation when redevelopment of the facility is completed. This marks the first deal Innovative Industrial has completed with LivWell, according to Paul Smithers, president and CEO of the REIT. Medicine Man Continues Buying Spree Denver-based Medicine Man Technologies continued its acquisition spree. The company, which has made 11 acquisitions in 2019, paid $31 million in stock and cash for Strawberry Fields , a cannabis operator based in Colorado Springs, Colorado. Strawberry Fields owns four recreational dispensaries in Colorado and operates a greenhouse grow. The Strawberry Fields purchase will be funded with $14 million in cash and $17 million in stock priced at $2.98 per share. Canndescent Raises $27.5 Million California-based Canndescent closed a $27.5 million Series C raise. The round was led by Green Acre Capital , a cannabis-specific venture fund from Canada, which was joined by Carnegie Arch Capital , Senterra , Altitude Investment Management , JWAsset Management and a multinational beer company from Asia. Supporting the transaction, DelMorgan & Co. and Benchmark acted as financial advisers. The additional investment will help fuel the company’s expansion into vapes and ingestibles as well as support the company’s current growth efforts in Massachusetts, Nevada, Canada and elsewhere. Big Pennsylvania Raise FarmaceuticalRX closed on two capital financings that provided an aggregate of approximately $18 million of working capital to the company. The $10 million Series A Preferred Unit financing was raised through a syndicate of high-net-worth individuals, and the $8 million Common Unit financing was raised through a separate group of investors. FarmaceuticalRX intends to use the net proceeds from these offerings for capital expenditures, working capital and general corporate requirements for the company’s Pennsylvania grower-processor operations. Viola Raises $16 Million Viola , a cannabis production company founded by former NBA player Al Harrington, closed a $16 million Series A funding round led by Gotham Green Partners . The capital will go toward funding U.S. DEVELOPMENTS Recent deals, acquisitions and other announce ents fro cannabis companies Company News | U.S., Canada & International