So far, 2021 has been a year of consolidation in the marijuana industry, and on Monday a new acquisition was added to that list. U.S.-based multistate operator Curaleaf (OTC:CURLF) announced it has signed an agreement to acquire Los Suenos Farms, which it says is the largest outdoor grow operation in Colorado. Curaleaf will pay $67 million in a mix of cash and stock for its new asset.
A total of 61% of the purchase price is to be paid in Curaleaf stock; 29% will be transacted in cash at the closing of the deal, and 10% will be in assumed debt maturing in five years. If certain 2022 operating cash flow targets are met, Los Suenos will be eligible for an additional $8 million in Curaleaf stock.
The arrangement involves three outdoor cultivation facilities in Pueblo, Colorado, which together comprise 66 acres of grow space. The properties also include an indoor cultivation facility with an 1,800-plant capacity, and two recreational marijuana dispensaries.
In Curaleaf's press release trumpeting the purchase of Los Suenos (which translates to "The Dreams"), the company quoted its chairman Boris Jordan as saying that it "establishes our foothold in the $2.2 billion Colorado market."
"This deal furthers our strategy of constructing low-cost supply chains that will secure healthy margins and position us for interstate commerce when it comes," Jordan added. "Ultimately, our goal is to cultivate cannabis at less than $100 per pound, and this acquisition is a significant step in the right direction."
Curaleaf's board of directors unanimously approved the Los Suenos deal, which is subject to approval by the relevant regulatory bodies.
It already seems to have the thumbs-up from shareholders. On Monday, Curaleaf's stock closed 2.8% higher against the 0.3% slide of the S&P 500 index.