Cresco Labs stock is in the red on Monday despite the company announcing that it had completed its acquisition of Massachusetts-based cannabis cultivator and retailer Hope Heal Health, Inc.
Cresco Continues Massachusetts Expansion
Cresco Labs (CSE:CL) (OTCQX:CRLBF) announced in pre-market trading on Friday that it had closed its acquisition of HHH after receiving regulatory approval for change in ownership granted by the Massachusetts Cannabis Control Commission. HHH holds licenses for cultivation, product manufacturing, and retail operations in Massachusetts, and can seek two more retail licenses in the state. HHH also operates a cultivation and manufacturing facility adjacent to its Fall River Dispensary. Despite the continued expansion, Cresco Labs stock is down nearly 4% today.
The closing of the deal coincides with the launch of recreational cannabis sales at the HHH dispensary. This license enables HHH to continue serving its existing medical-use customer base, while also meeting the demands of the fast-growing adult-use market through the retail and wholesale distribution of Cresco’s house of brands. 2019 was the first year of legal cannabis in Massachusetts, with sales exceeding US$450 million, according to the Cannabis Control Commission.
Cresco Labs stock is currently trading for $6.86.
Cresco Labs Stock Down 25% in 2020
Cresco Labs CEO and Co-founder Charlie Bachtell said, “In our pursuit of achieving the most strategic geographic footprint in the U.S., we are thrilled to begin serving adult-use customers and continue serving medical patients in Massachusetts. […] Now that we’ve officially closed the acquisition, we’re stepping into a fully operational, vertically integrated business that is immediately accretive with both positive EBITDA and cash flow.”
Cresco Labs stock has actually fallen nearly 25% since announcing it had completed its takeover of Origin House at the beginning of the year, which solidified the company’s position as one of the largest cannabis firms in the US. The US$1 billion takeover was first announced back in April but was slashed in valuation in November amid a broader underperformance of the cannabis market.
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