Curaleaf Holdings, Inc. (CURLF) (CURA) recently closed a deal with Acres Cannabis. Curaleaf bought Acres’ cultivation and production facilities in Amargosa Valley, Nevada. This 269,000-square-foot facility is for processing. With this deal, the company can expand its cultivation and processing operations in Nevada.
Details of the deal
On March 18, 2019, Curaleaf signed a deal to buy Acres Cannabis. Acres has one of Nevada’s largest cultivation facilities. Also, this agreement includes a state-of-the-art lab for production and extraction. Acres currently has a functional dispensary in Las Vegas. It also has another dispensary under construction in Ely. The dispensary in Las Vegas is a 19,000-square-foot experiential store. It hosts a farmers market for American marijuana producers every weekend.
Acres facility has 42,000 square feet of greenhouses and 227,000 square feet of outdoor facilities. Further, 133,000 square feet for site improvement is under construction. At over 400,000 square feet, the facility’s annual capacity is 100,000 pounds of dry flowers. Also, the facility allows customers to visit the processing site to see the method of extractions.
The value of this transaction is $70 million. In that, $25 million will be in cash and $45 million in Curaleaf stock. Acres dispensaries will be branded as Curaleaf by the end of the year. This further expands its operations under a single brand across the United States.
Acres CEO John Mueller said: “Since announcing the transaction this March, we have seen the professionalism and extensive management expertise of the Curaleaf team and Acres could not be happier about the future for our dedicated staff. We selected the best partner in the industry.”
Curaleaf’s future plan
Curaleaf is a vertically integrated cannabis player in the US. The company is in 12 states and has 49 dispensaries. Further, the company has 14 cultivation sites and 13 processing facilities. Following the transaction for the facilities in Amargosa Valley, Curaleaf continues to work with the regulators for the smooth transfer of Acres’ facilities in Las Vegas and Ely. This transfer to Curaleaf is already approved at the state level and it is expected to be completed by the end of this year.
Curaleaf CEO Joseph Lusardi said: “The completion of the cultivation and processing component of the Acres transaction is further evidence of the execution of our plan to expand our business through a combination of strategic M&A, disciplined operations and organic growth”.
The Acres deal will boost Curaleaf’s production capacity. The company plans to use this deal to supply its flagship dispensary in Las Vegas. Further, the company will cater to its Nevada dispensaries using the produces from indoor facilities.
Curaleaf buys MACHNV, but stock falls
Also, Curaleaf signed a deal to buy MACHNV LLC for $70 million and Cura Partners for 55 million Curaleaf shares by the end of the year. However, the company’s shares fell by more than 6% after the press release on October 30, 2019. The company has lost almost 38% of its stock value in the last three months.