Cannabis Acquisition: Harvest Health Buys Verano For $850 Million

Harvest Acquisition — Cannabis company Harvest Health & Recreation will acquire cannabis facilities operator Verano Holdings for $850 million. Marijuana on a scale at Virgil Grant's dispensary in Los Angeles, California on February 8, 2018. - Virgil Grant is riding the high on California's cannabis legalization, with a burgeoning empire that already comprises three dispensaries, two plantations and a line of apparel. His success has come as some compensation for the six years lost inside the federal prison system for dealing the drug. Getty Images/FREDERIC J. BROWN

Cannabis company Harvest Health & Recreation, Inc. (HARV.CN) has entered into a binding agreement to acquire Verano Holdings, LLC, a multi-state cannabis facilities operator for approximately $850 million.

Through the acquisition, Harvest will be allowed to operate 200 facilities in 16 states and territories in the U.S., including 123 retail dispensaries. It will also hold seven cultivation licenses, 37 retail licenses, and have a new potential customer base of over 150 million Americans.

The merger will provide for 300 new jobs in 2019, which the company said will focus on minorities, women, and veterans. Harvest will have access to a portfolio of over 150 product SKUs that are sold in 150 retail locations with a cultivation capacity of 900,000 square feet in Illinois, Nevada, and Maryland.

Once the acquisition is complete, Harvest expects to operate 30 cannabis dispensaries, eight cultivation facilities, and seven manufacturing plants. It also is planning for aggressive growth to be completed by the end of 2019, with over 70 dispensaries, 13 cultivation facilities, and 13 manufacturing plants in operation. In 2020, the company expects even more growth, it said.

Operations of the two companies will continue in Arizona and Illinois while building on the relationships that have been developed in the consumer-packaged-goods, beverage, spirits, logistics, branding, horticulture, and extraction technologies industries, the companies said.

“From day one, we have operated as a fundamentally sound business focused on consistent revenue and profit growth. Steve White, CEO at Harvest said. “We are excited to bring Verano’s premium brands and operations into Harvest.

“We have the unique opportunity to create truly national brands by deploying these products within the future combined footprint of states and dispensaries. Most importantly, we share the same mission as one new company to improve people’s lives through the goodness of cannabis.”

The company expects the transaction for Verano to close in the first half of 2019.

Shares of Harvest stock were up 13.62 percent as of 1:10 p.m. ET on Monday.