Portland, Oregon-based Cura Cannabis, one of the nation’s largest producers and distributors of cannabis products, was acquired by Curaleaf Holdings today for a record all-stock valuation of $1.1 Billion.
This is the largest acquisition deal in the history of the U.S. legal cannabis industry…thus far.
Curaleaf Holdings, based in Massachusetts, reported $87.8 million in revenue in 2018 compared to $117 million in revenue from Cura. The combined company market value is over $6.5 Billion as of May 1, 2019.
“The transformational acquisition of Cura and the Select brand is another step in our journey to create the most accessible cannabis brands in the U.S.,” Joseph Lusardi, Curaleaf’s chief executive, said in an official release.
The Portland company’s chief executive, Cameron Forni, will become Curaleaf’s president. He said “The leading companies in the industry on the West Coast and the East Coast are now joining forces to progress the legalization and mainstream acceptance of cannabis across the country.”
Cura’s main product line of vape cartridges falls under its proprietary brand, Select Oils, and includes both THC and CBD varieties.
This news follows the Canadian cannabis firm, Canopy Growth’s $3.4 Billion bid to acquire US firm Acreage Holdings. While that deal is still pending, it’s yet another example of the massive consolidation beginning to occur within the cannabis industry.
“Not all the companies in cannabis today need to exist and they won’t exist,” said Acreage Holdings CEO Kevin Murphy.
All of these merger actions speak to the increasing confidence operators and investors in the cannabis sector have of the industry’s potential, despite a Federal ban remaining on the books.
“I think the trouble people are having is, how long is it going to take for it to be [federally] permissible in the US,” Murphy said. “We have a view, given we have a number of board members who are cued into Washington… in regards to it being permissible we believe it’s 12 to 18 months out, not four to six years out.”
Ultimately this continues to push job growth in the sector, with cannabis claiming to be the fastest growing industry in 2018, exceeding 210,000 new positions created.
Speaking with CNBC today, Curaleaf Holdings Chairman, Boris Jordan, highlighted that the company plans to keep the brands independent.
“We are separating because Curaleaf’s roots are development in the medical side with roots on the East Coast so it’s more of a wellness brand today, and Select, which has its roots on the west coast is more of lifestyle brand, so we are going to try to focus Curaleaf on wellness and Select on adult recreational,” said Jordan.