Origin House stock is skyrocketing today as the company readies itself to be acquired by Cresco Labs (CSE:CL) (OTCQX:CRLBF). The cannabis products and brands company announced that it divested its 5.1% equity share in Alternative Medical Enterprises LLC for a cool $6 million USD.
This sale was an important step for Origin House (CSE:OH) (OTCQX:ORHOF) to make, and now Origin stock is up 10.84%, selling for $7.26.
Origin House Stock
The influx of cash is not the sole reason for the stock climb. Rather, the sale was a pre-closing condition under the terms of the Cresco/Origin House acquisition. Now, that deal is one vital step closer to closing.
Cresco Labs is prohibited under state law from acquiring additional positions in the Florida market, and so if it wanted to own Origin House, it needed Origin to sell its stake in the Florida-based Alternative Medical Enterprises.
Now that it has, Cresco can keep its agreement to “acquire all of the issued and outstanding shares of Origin House.”
And, as stated, the $6 million received from the sale is a nice bonus that is helping to spur on Origin House stock. Company Chairman and CEO, Marc Lustig, stated to investors:
“The sale of the remaining AltMed interest marks a significant milestone in the continued process whereby Origin House has monetized non-core holdings resulting in both substantial returns for shareholders and additional cash that has fueled the Company’s growth.”
Cresco and Origin
Cresco announced its acquisition of Origin House in April this year. The all-stock deal worth $1.1 billion USD aims to establish a North American cannabis conglomerate.
The news caused Origin stock to soar over 10% the following day.
The US’s Cresco Labs plans to take advantage of Origin’s strong presence in the Californian market—where Origin already distributes most of the state’s top cannabis brands.
At present, Origin owns and distributes more than 130 cannabis brands and is also involved in financing through its subsidiary Trichome Financial Corp.
Now, with its shares of AltMed divested, the Cresco/Origin deal looks primed to close; much to investors’ excitement no doubt.
What are your thoughts on this? Is Origin House stock on your radar?
Featured Image: Origin House