What was one of the largest acquisitions ever announced in the marijuana industry – a deal valued at $850 million when Phoenix-based multistate marijuana operator Harvest Health & Recreation said a year ago it would buy Chicago’s Verano Holdings – has been mutually terminated, the two companies said Thursday.
The coronavirus and other financial and regulatory challenges played a role in the deal collapsing, officials from both companies said.
“Now, with the COVID-19 pandemic often being dealt with in the very agencies that must approve the transaction, it has become clear that this combination would not be completed within the established time frame,” George Archos, CEO of Verano Holdings, said in a statement.
Other reasons given for the termination of the deal included:
- Prolonged obstacles in meeting requirements for state and local regulators needed to transfer ownership and operational license.
- Adverse capital market conditions.
- A challenging environment for asset sales.
No breakup fees or other considerations are owed by either party as a result of the termination of what was called a business combination agreement.
“Given the persistent challenges in consummating this deal and current market conditions, both companies felt it was prudent to move forward separately at this time,” Harvest CEO Steve White said in a statement.
He said Harvest will continue to develop assets in its core markets, including Arizona, Florida, Maryland and Pennsylvania.
In recent months, a number of mergers in the marijuana industry either have been revamped or canceled.
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