Marijuana multistate operators Columbia Care and Cresco Labs have “mutually agreed” to extend the companies’ acquisition closing date timeline from March 31 to June 30 of this year.
It’s the second such extension, which underscores the complexities of closing a large deal at a time when other acquisitions have been called off amid widespread layoffs and tight funding in the cannabis industry.
According to a news release, the extension will give Cresco and Columbia Care time to finalize asset divestiture agreements necessary to close the merger and obtain approvals from regulatory bodies.
Chicago-based Cresco Labs’ acquisition of Columbia Care, valued at approximately $2 billion last March, is contingent on both companies selling off a number of assets.
The megadeal initially had been scheduled to close in December 2022.
That date was postponed until March, raising questions about whether the merger would indeed close. The latest delay is sure to fuel added speculation.
Many of the companies’ assets are slated to be sold to rapper and business mogul Sean “Diddy” Combs, who plans to create the first Black-owned multistate cannabis operator in the United States.
Assets in Florida, Maryland and Ohio still need to be sold to close the merger.
“We continue to make meaningful progress on the remaining divestitures and look forward to making those announcements,” Nicholas Vita, CEO of New York-based Columbia Care, said in a statement.
In the meantime, Vita said the company is “driving operational efficiencies, enhancing market-level scale to offset pricing pressure and demonstrating leadership in several of the fastest growing markets in the industry, such as New Jersey, Virginia and West Virginia.”
Earlier this year, Columbia Care laid off 25% of its corporate head count.
Columbia Care will announce its fourth-quarter and full-year financial results on March 29.