Marijuana multistate operator Cresco Labs has exited Arizona by selling its only asset in the state, Encanto, for $6.5 million in cash to Mint Cannabis.
Leaving the Arizona cannabis market “aligns with our strategy of optimizing our portfolio by prioritizing assets with a greater path to scale,” Cresco CEO Charlie Bachtell said in a statement.
The sale to Mint was closed after regulatory approval on Oct. 17 according to a Thursday news release.
Separately, the Chicago-based MSO secured a mortgage worth up to $25.3 million on its properties in Ellenville, New York, the release noted.
“Approximately $20 million was funded at close, with the remaining principal held to fund future capital expenditures,” Cresco said in the release.
The 10-year mortgage carries an 8.43% interest rate at the outset.
“This non-dilutive financing is another sensible tool for optimizing our balance sheet and lowering our cost of capital as we continue to strengthen our overall business,” Bachtell said.
Some other marijuana MSOs also have cut their presence in Arizona this year:
“It has always been our stated objective to ensure that we match internal supply with internal demand in order to maximize margins and long-term returns,” Vext CEO Eric Offenberger said in a statement.
“Following the opening of our modular cultivation facility in Eloy (Arizona) earlier this year, we have the ability to grow our cultivation capacity in lockstep with demand from our owned dispensaries, as the market grows and as we see opportunities to expand our retail footprint in the state.”
• Ayr Wellness in February announced its divestment from Arizona, simultaneously announcing acquisitions in Ohio.