Columbia Care Inc. (OTCQX: CCHWF) is buying California-based dispensary The Healing Center San Diego (THCSD) for approximately $15.0 million. The deal consists of $3.0 million in cash, $6.0 million in Columbia Care stock, and $6.0 million in seller promissory notes. The company said in a statement that excluding any revenue or margin synergies, the purchase price represents approximately 1.2x and 4.7x estimated 2021 revenue and Adjusted EBITDA, respectively.
“Expanding the retail footprint in our operational markets enhances scale, improves consumer access, leverages Columbia Care brands, drives margin expansion through the supply chain and delivers outsized shareholder returns – pillars of our stated growth strategy. Being a leader in California enables us to continue building brand equity and awareness across our product portfolio and solidify consumer loyalty and trust, which are the cornerstones of our success,” said Nicholas Vita, CEO of Columbia Care. “THCSD has been a cannabis bellwether since its founding and has built a business with a loyal customer base. We are thrilled they have entrusted us to accelerate the excellence THCSD is known for. We share a mutual commitment to quality and customer service, and THCSD customers can expect that to continue.”
THCSD was founded by Ray Taylor and Jim Dickinson in 2016 as one of the first dispensaries to operate in San Diego, a limited license market. The dispensary offers a wide selection of products, high touch customer service, outstanding access, and an expanded sales floor that will be open soon. THCSD said it continually receives some of the highest online customer ratings in California’s second-largest metropolitan market.
This latest move by Columbia Care demonstrates its plan to plant a flag in the California market as it follows the recent acquisition of Project Cannabis. Columbia Care now has three dispensaries and one state-of-the-art indoor cultivation facility in Los Angeles; two dispensaries and one GMP quality manufacturing facility in San Diego; several acres of outdoor cultivation capacity in Desert Hot Springs; and one dispensary in San Francisco. The Company also has state-wide distribution and wholesale relationships with more than 100 dispensaries.
Last week the company opened its first dispensary in Virginia as the only vertically integrated medical cannabis provider in the Hampton Roads/Norfolk region. “We are so grateful for the opportunity to serve the patients of Virginia. The team has been working hard to open our Portsmouth dispensary and we are all so excited to be able to serve the Hampton Roads patient community,” said Vita. “We are very proud to support economic growth in the region as part of our service to the community. Our dispensary and cultivation teams, as residents themselves, reflect the incredible diversity of Hampton Roads, and we are thrilled to have such strong leadership in place to establish our presence and become rooted in our community as we continue to grow together.”
Columbia Care has four analysts following the stock according to Yahoo Finance. They all have Buy ratings and an average target price of $$7.75. The stock was lately selling at $6.54.