Shares of Cresco Labs (CSE:CL) (OTCQX:CRLBF) are on the rise 6.07% at the time of writing and selling for $10.49 USD. The company announced that it received regulatory approval for its acquisition "of 100% of the membership interests of Gloucester Street Capital, LLC, the parent entity of Valley Agriceuticals, LLC via a merger between Gloucester and an indirect subsidiary of Cresco Labs."
The news has caused shares to surge—a much-needed respite for this ailing stock that has lost over 33% since mid-June.
Cresco Labs: Damaged in Recent Months
Cresco is one of the US's largest multi-state and vertically integrated cannabis operators. The new acquisition means the company will now have access to "one of the 10 vertically integrated cannabis business licenses granted in the State of New York by the New York State Department of Health."
This comes through the indirect takeover of Valley Agriceuticals.
Now, Cresco will have the right to operate one cultivation facility and four dispensaries in New York as permitted by the license. The dispensaries in question are located in Bardonia and New Hartford, along with Williamsburg, Brooklyn, and Huntington, Long Island—the latter of which are new and expected to open within the next 14 days. The acquisition is expected to close by the end of August.
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Cresco Labs Now
As stated, the news has boosted Cresco Labs stock and it's not surprising as to why. New York represents a mecca for the medical-use cannabis market with close to 20 million residents and approximately 105,000 certified patients.
But Cresco has already been on the radar in 2019. Despite losing much of its gains thus far this year, the company managed to nearly double its share value before June's crash.
The reason for this is two-fold: the pending acquisition of Origin House (CSE:OH) (OTCQX:ORHOF), which makes Cresco far bigger than it currently is, and the American market in which it operates is far bigger than the Canadian market and this offers a much greater return.
According to SeekingAlpha:
“The market may not know this company yet, but [Cresco] is on pace to become one of the largest global cannabis players with a relatively cheap market valuation of around $4.1 billion.”
What are your thoughts on Cresco Labs?
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