Curaleaf Holdings, Inc. (CSE: CURA / OTCQX: CURLF) is acquiring Nevada-based Acres Cannabis in a deal valued at $70 million that is expected to close in 2019. According to the company statement, Acres operates Nevada’s largest cultivation facility, a state-of-the-art production and extraction lab and an immersive cannabis dispensary located in the city of Las Vegas, adjacent to the Strip, with a second dispensary under construction.
The acquisition is valued at $70 million, with $25 million to be paid in cash, $45 million to be paid in Curaleaf stock and additional consideration to be paid if certain financial targets are exceeded.
“The acquisition of Acres is a major step in expanding our vertical platform in Nevada. Acres operates a flagship dispensary in the heart of Las Vegas, complementing our existing assets in the state extremely well, and importantly, we can control the consistency, quality, and production cost of our own cannabis products,” said Joseph Lusardi, CEO of Curaleaf. “We have built the most accessible, trusted and reliable cannabis brand and are extremely excited about the prospects in Nevada both for retail and wholesale activity.”
Curaleaf said that the Acres acquisition will significantly increase its cultivation and manufacturing operations from which Curaleaf will supply its own flagship dispensary at 1736 Las Vegas Blvd in Las Vegas, scheduled to open in the second quarter of this year. Curaleaf said it will further continue the operation of its indoor grow facility, located near Las Vegas.
The addition of Acres’ cultivation platform will provide Curaleaf with 42,000 sq. ft. of functioning climate-controlled greenhouses and 227,000 sq. ft. of outdoor cultivation in Amargosa Valley. The site is currently under construction, adding another 133,000 sq. ft. of capacity. At over 400,000 sq. ft., the facility is expected to generate 100,000 pounds of dry flower per year at full scale. During the fourth quarter of 2018, Acres harvested over 5,000 pounds of flower.
“Curaleaf’s management, vision, and rapid expansion plans made them the natural fit for Acres,” said John Mueller, CEO of Acres. “Acres believes Curaleaf is very well positioned to continue to be the largest cannabis operator in the U.S. giving our partners significant upside.”
Acres also operates a 19,000 sq. ft. dispensary in Las Vegas. The cannabis experiential store is open 24 hours a day, 7 days a week, and hosts America’s first marijuana farmers market every weekend. Steeped in the cannabis culture, the facilities offer a museum and open view processing kitchen where customers can view the processing of edibles and extracts. Acres also has a second dispensary in Ely, Nevada currently under construction and scheduled to open later this year. The dispensaries are expected to be branded as Curaleaf by year-end to further expand its leading footprint as the largest operator of single-branded dispensaries in the U.S.