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GTBIF Acquires Advanced Grow Labs and Enters Connecticut Market

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Jan. 14 2019, Updated 4:10 p.m. ET

Acquisition of AGL

In January, Green Thumb Industries (GTBIF) announced that it had entered into a definitive agreement to acquire Advanced Grow Labs for a value of $80.0 million. 

The acquisition includes $15.0 million in cash and 7.0 million subordinate voting shares of Green Thumb Industries. The companies expect the deal to close by the first quarter of 2019.

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Benefits of the acquisition

Advanced Grow Labs is among the four companies in Connecticut that have licenses to grow and process cannabis products. Advanced Grow Labs has 41,000 square feet of manufacturing facility in Connecticut and 46% ownership of a dispensary that will be established in Westport, and this will make it the only vertically licensed company in Connecticut.

When the acquisition deal is over, Green Thumb Industries will have a total of 12 manufacturing facilities and 85 licensed retail locations across 11 states in the United States. The acquisition deal will also see Green Thumb Industries enter the Connecticut market.

With over 30,000 patients and 1,000 physicians in the Connecticut medical marijuana program, the company’s entry into the Connecticut market could significantly boost its revenue growth.

Other recent developments

On January 10, 2019, Green Thumb Industries announced that it had received an Ohio processing license for the manufacturing and commercialization of its cannabis product in Ohio. The company noted that it would establish its processing facility in Toledo.

In December, Green Thumb Industries received four additional licenses from the Pennsylvania Department of Health. Each license allows for the opening of a maximum of three retail stores in the state. The company plans to open 12 RISE retail stores at different sites in Philadelphia and Pittsburgh.

These licenses, which were awarded to Green Thumb Industries by different regulatory authorities, could significantly boost the company’s revenue growth.

In the US market, Green Thumb Industries’ peers include Charlotte’s Web Holdings (CWBHF), Liberty Health Sciences (LHSIF), and Trulieve Cannabis (TCNNF). These companies’ stocks had risen ~18%, ~13%, and ~8%, respectively, year-to-date as of January 11.

In the next article, we’ll discuss Green Thumb Industries’ financials in detail.

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