Curaleaf Holdings, Inc. (OTCQX: CURLF) is buying western state operator Tryke Companies known for its Reef Dispensaries in a deal valued at approximately $286 million. The acquisition is expected to close in the second half of 2021. Curaleaf said it will be immediately accretive. Tryke is expected to deliver nearly $110 million in full year 2021 revenue.
Tryke was founded in Arizona in 2014, but is known for its efforts to steer the Nevada’s legal cannabis market from its inception in 201. The company is also known to lead the industry in Utah where it has worked since 2019 to help establish the state’s medical cannabis program. Tryke currently owns and operates six heavily trafficked dispensaries under the Reef brand, with two retail stores in Arizona and four in Nevada, including the Phoenix metropolitan area, Las Vegas strip and North Las Vegas. The company’s products are sold in over 50 additional locations across its footprint.
“This strategically and financially compelling transaction will expand our US presence by bringing additional premium products to our consumers and retailers in Nevada, Arizona and Utah, all while yielding meaningful benefits for all of our stakeholders,” said Boris Jordan, Founder and Executive Chairman of Curaleaf. “We expect the acquisition to be immediately accretive to our EBITDA margins and free cash flow generation upon closing.”
Curaleaf said it will assume ownership of Tryke’s extensive portfolio of processing licenses and expects to significantly expand its cultivation capacity from 30,000 square feet to over 80,000 square feet over the next three years.
“This is a tremendous opportunity for Tryke and, as a combined entity, we will continue to deliver significant value for our consumers and retailers in Arizona, Nevada and Utah,” said Adam Ryan, Chief Executive Officer of Tryke Companies. “As a part of Curaleaf’s growing network of dispensaries, Tryke is excited to bring its full suite of multi-price point products to an expanded base of consumers across the country.”
Curaleaf will announce its financial results for the third quarter of 2021 after the market close on Monday.