Cannabis MSO Columbia Care to buy California firm in $69 million deal

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Multistate operator Columbia Care agreed to acquire Los Angeles-based marijuana grower and retailer Project Cannabis in a deal valued at $69 million.

“The acquisition of Project Cannabis enables Columbia Care to materially increase its scale throughout California and position its wholesale and manufacturing operations as one of the leading suppliers in the state,” the New York-based company said in a news release issued Tuesday.

Project Cannabis’ assets include a 32,000-square-foot cultivation facility, three adult-use shops in Los Angeles and a recreational store in San Francisco.

The company distributes to more than 100 California dispensaries, and will continue selling its portfolio along with Columbia Care products and merchandise from Columbia Care’s recent acquisition of The Green Solution.

Columbia Care CEO Nicholas Vita said the acquisition will bring operating synergies expected to increase gross margins for certain SKUs by 10% to 15%.

The acquisition’s $69 million price tag involves a concurrent deal in which Project Cannabis’ real estate will be sold to an unspecified third party and leased back for proceeds of between $12 million and $17 million.

Columbia Care will issue between $52 million and $57 million in stock to complete the transaction.

The company used a sale-and-leaseback deal to raise $35 million last December, and another such deal to raise $14 million in July.