Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) signed a definitive deal to buy California-based Eureka Investment Partners, LLC. Eureka operates a cultivation facility in the Salinas Valley and is developing three dispensaries across the state. The deal is valued at $30.5 million, of which $10 million is to be paid in cash, $20.5 million in Curaleaf stock, with a potential added bonus to be paid if certain goals are met. The deal is expected to close in March 2019.
By making this acquisition, Curaleaf will gain access to California’s wholesale market through an existing 110,000 sq. ft. greenhouse facility in Salinas, California, with the potential to expand up to 270,000 sq. ft. that could generate over 50,000 pounds of dry flower per year at full scale. The company said that during the fourth quarter of 2018, Eureka harvested over 2,500 pounds of flower and distributed pre-rolls and dry flower under the brand Monterey Kush. Curaleaf is expected to launch its retail network in California in the second half of 2019. The planned launch of Eureka’s three premium locations will be in Long Beach, Salinas and Monterey County.
“The Eureka transaction represents a significant milestone for Curaleaf, enabling us to enter the highly attractive California market with a cultivation platform that we intend to use for state-wide product distribution,” said Joseph Lusardi, CEO of Curaleaf. “The planned launch of three dispensaries is a platform investment for Curaleaf’s retail expansion strategy to eventually cover the state, which is the largest market for cannabis consumption in the country. With established vertically integrated operations, Curaleaf is ready to capitalize on the considerable market opportunity in California.”
Canadian-based Choom Holdings Inc. (CSE: CHOO) (OTCQB: CHOOF) also announced an acquisition on Wednesday. The company said that it had entered into a deal to buy Clarity Cannabis MD Holdings. The agreement includes 30 retail locations, three of which are licensed with the Alberta Gaming, Liquor & Cannabis Commission (AGLC). Choom will issue 8,867,000 Choom Shares and pay $2.5 million to the principal in connection with the acquisition.
“We are thrilled to welcome Clarity into the Choom brands portfolio through this acquisition,” states Chris Bogart, President & CEO of Choom. “Clarity has been successfully operating in Alberta since December and has submitted applications across the province. This transaction gives us a strong foothold in the Alberta retail landscape. Moving forward we will be working diligently to maximize our retail footprint Canada wide, and this transaction helps us to achieve that goal.”
Choom said that Clarity has successfully progressed through AGLC licensing and is operating three stores in the legal adult use cannabis market in Alberta. They are High River, Cold Lake, and Red Deer. Clarity currently has 11 development permits awaiting construction, with 6 stores to commence construction, and 9 stores completed construction.
In November, Choom received a C$20 million investment from Aurora Cannabis (ACB). No doubt that investment helped fund this acquisition.