More than a year after it was first agreed upon, a big tie-up in the marijuana industry has finally been completed. Curaleaf (CURLF 2.70%) announced Thursday it is now the owner of Grassroots, which it says makes it the largest cannabis business in the world in terms of revenue.
Curaleaf and Grassroots originally announced they would merge in July 2019. At the time, the cash-and-stock deal was valued at roughly $875 million. Last month, however, the two companies agreed to downsize the price tag to around $700 million.
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Owning Grassroots expands the footprint of Curaleaf, already a prominent dispensary operator, to 23 states from its pre-merger tally of 18. All told, the bulked-up company holds more than 135 dispensary licenses, 88 currently operational retail stores, 22 cultivation sites, and over 30 processing facilities. According to Curaleaf, the geographic markets it now serves with its retail locations contain more than 192 million people.
The absorption of Grassroots should be immediately accretive to Curaleaf's finances, the company said, though it did not provide specific figures.
Grassroots CEO Mitchell Kahn will have a presence in the new Curaleaf. He is taking a seat on the board of directors, expanding its membership from five to six. In its press release, Curaleaf touted Kahn's 20 years of senior management experience in the cannabis, real estate, and legal fields.
Curaleaf CEO Joseph Lusardi said the combined company offers "unprecedented scale providing significant opportunities to leverage Curaleaf's powerful consumer brands as well as new form factor innovations across our expanded national presence."
The company's stock finished the week by rising 1.1% on Friday, in contrast to the declines of the wider stock market.
