Columbia Care Archives - Green Market Report

StaffAugust 12, 2021

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Columbia Care Inc. (CSE: CCHW) (OTCQX: CCHWF) reported financial and operating results for the second quarter ending June 30, 2021, as revenue grew 232% to $109.7 million. This was a sequential increase of 19% and in line with the average analyst estimate from Yahoo Finance for revenue of $109 million. Columbia Care noted that the second quarter 2021 results included contributions from Green Leaf Medical as of the date of acquisition, June 10, 2021. With the close of the Ohio acquisition in July, all financial reporting will be consolidated under Reported Results going forward.

The net losses were trimmed to $10 million from last year’s $27 million. The earnings per share improved to ($0.03) from last year’s ($0.11) for the same time period. This missed the estimates for earnings of ($0.02). The company burned through $27 million in cash in the quarter. However, the cash balance is still a very healthy $148 million.

“We are pleased to report another record quarter for Columbia Care as we continue to execute on our strategic initiatives and build scale in markets across the country,” said Nicholas Vita, CEO of Columbia Care. “Our results in the second quarter were driven by organic growth in new and maturing markets, increasing wholesale activity, and contribution from our recently closed acquisition of Green Leaf Medical (gLeaf). We saw continued year over year and sequential improvement in both gross and Adjusted EBITDA margins as we leverage the scale of our national portfolio and ramp in newer markets.”

Columbia Care also stated that its top five markets by combined revenue were: California, Colorado, Massachusetts, Ohio, Pennsylvania. The top five markets by adjusted EBITDA were: Colorado, Illinois, Massachusetts, Ohio, Pennsylvania.

Vita continued, “The ongoing national rollout of our Cannabist retail storefront, with five Cannabist locations open to date, has been very successful and underpins our ongoing initiative to establish a portfolio of national product brands, beginning with our unique store-based experience. We are pleased to report a record number of new product and brand introductions in our markets, such as Seed & Strain flower and vapes, Triple Seven flower, and Plant Sugar edibles.”

The company reaffirmed its 2021 revenue guidance of $500 – $530 million and adjusted EBITDA guidance of $95 – $105 million. Columbia Care’s said its 2021 outlook is based on current trends and is consistent with the forecast previously provided on March 16, 2021. Columbia Care said its pro forma 2021 outlook does not assume any future changes in the regulatory environment in markets where Columbia Care currently operates.

“Fundamentals continue to improve as we build scale, execute on planned CAPEX expansion projects, and build brand equity at the retail and product levels from coast to coast. We have more growth initiatives underway than ever before, and with New York, New Jersey and Virginia poised to transition to adult use, the opportunities for Columbia Care have never been greater. We have set the stage for a tremendous second half of the year with momentum building into 2022 and look forward to continuing to execute our strategic vision.”

Debra BorchardtMay 17, 2021

Columbia Care Inc. (OTCQX: CCHWF) reported financial and operating results for the first quarter ended March 31, 2021, with revenue increasing 220% to $92.5 million year-over-year and growing by 13% over the previous quarter. Columbia Care missed the Yahoo Finance average analyst estimate for revenue of $94.1 million.

The net losses were trimmed to $15.3 million from last year’s $20.6 million for the same time period. The earnings per share also improved to ($0.05) from last year’s ($0.09.), however, it wasn’t enough to meet the average analyst estimate for ($0.04) per share. Analysts give the stock a price target of $11.65 on average. Shares have been in an overall uptrend over the past six months and were lately selling at $6.17.

“We sustained our record 2020 momentum into the first quarter of 2021, with significant growth across both the top and bottom line,” said Nicholas Vita, CEO of Columbia Care. “Our combined revenue results reflect organic growth and further integration progress on key California and Colorado acquisitions. We continue to build scale and leverage in our existing markets, leading to positive trendlines for growth and profitability. The sequential increase in combined revenue and Adjusted EBITDA more than offset expected seasonality in Colorado and recently lifted COVID restrictions in California and was driven by substantial growth in Florida, Arizona, Illinois, and Ohio. Legacy Columbia Care’s same-store sales increased 60 percent year over year.

Indeed, in Arizona, same-store sales increased approximately 70% from the same period last year, driven largely by the accelerated statewide roll-out of adult-use sales in January. In Ohio, Columbia Care said that same-store sales were up more than 3x YoY and with wholesale relationships with more than 85% of dispensaries in the state. In Florida, the company said that revenue rose 58% sequentially and experienced significant same-store sales expansion, due to dispensary-level supply chain improvements and flower availability. California also saw its sales jump towards the end of the quarter as pandemic restrictions began lifting. The company noted that there was sequential revenue growth of nearly 3x with addition of acquisitions, increasing wholesale momentum throughout the first quarter.

In Colorado, revenue improved 27% over last year, but sequential results slowed in the first quarter due to expected seasonality and decision to partially take off-line and upgrade largest indoor grow in preparation for ‘100 days of heat’ during the second quarter and third quarter leading to accelerated GM and EBITDA expansion in the second quarter and back half of 2021.

Vita added, “Recognizing the tremendous opportunity we have before us, we continue to deepen our state, regional and national footprint by adding scale to capitalize on additional upside in rapidly expanding medical programs and, in particular, in markets transitioning to adult-use across the country. Significant strategic investments in markets such as New York, New Jersey and Virginia will enable us to be the most efficient and scaled leaders in those markets and will cement our position as the industry leader on the east coast.”

In New Jersey, retail sales growth outperformed expectations year-over-year and doubled sequentially. There was a significant drag on overall gross margin due to accelerated development of cultivation and manufacturing fixed assets; however, the first significant harvest from the legacy Vineland facility expected in the third quarter. Plus, two additional dispensaries will open in 2021 and become new Cannabist stores. In New York, revenue rose +60% over last years and was due in part to the wholesale business and strong home delivery program.

Cannabist Launch

The company recently rebranded its stores as the Cannabist. The first location to launch under the Cannabist brand is the recently opened dispensary in Springville, Utah, which had its first sale Friday, April 30. By the end of May, three existing Columbia Care locations, in Tempe, Arizona, Villa Park, Illinois, and San Diego, California, will become Cannabist branded retail locations, with a pipeline of more than 80 new and existing locations to follow over the next 24 months.

Vita continued, “We are leveraging our vertically integrated national platform and advancing our ongoing product and retail branding initiatives. Last week, we unveiled the Cannabist retail ecosystem, which is now open in Utah, a new market for Columbia Care, bringing our active market total to 15 nationwide. The Cannabist experience will be introduced across additional locations in the coming months – from San Diego to Boston – complementing the ongoing nationwide rollout of our product brands such as Seed & Strain, Triple Seven, Press, Amber and Classix.

Looking Ahead

Columbia Care said it reaffirms guidance for the 2021 combined revenue of $500 – $530 million and Adjusted EBITDA guidance of $95 – $105 million as the Green Leaf Acquisition remains on track for closing at beginning of the third quarter.

Debra BorchardtMay 12, 2021

Columbia Care Inc. (OTCQX: CCHWF) launched its new retail brand, Cannabist. The company said that Cannabist will serve as the intersection for medical and recreational cannabis users to provide a higher experience built on one of the largest customer data repositories, passion, technology innovation, community commitment and product standards.

“Since the Company’s founding in 2013, we have been listening to and learning about the communities, customers and stakeholders we serve. Over and over again, the market has been searching for expertise and trust – consumers wanted a Cannabist to help guide them through their journey. Cannabist was developed to redefine the existing dispensary concept. This new storefront brand represents the next step in the evolution of the dispensary model and will become a national standard in the years to come. For nearly ten years, Columbia Care has been synonymous with patient-centered service and the highest quality cannabis products on the market. This heritage, coupled with the passion each and every employee brings to building the company, are at the core of our continuous growth year over year,” said Nicholas Vita, CEO of Columbia Care. “The rate at which the cannabis industry is growing, and at which states are legalizing cannabis use, has meant that we’ve had to evolve as a company. We’ve recognized the need for a retail brand that reflects who we are as a company as well as addresses the diversity of the patients, customers and communities we serve, while remaining true to what has made us so successful.”

The first location to launch under the Cannabist brand is the recently opened dispensary in Springville, Utah, which had its first sale Friday, April 30. By the end of May, three existing Columbia Care locations, in Tempe, Arizona, Villa Park, Illinois, and San Diego, California, will become Cannabist branded retail locations, with a pipeline of more than 80 new and existing locations to follow over the next 24 months.

Improving Shopping Experience

2104-16 1230 Columbia Care Cannabist Stocked Space
April 29, 2021
© 2021 / Meagan Larsen

Columbia Care said that the Cannabist retail experience is centered on making shopping for cannabis as simple and approachable as possible, accommodating the vast range of experience levels patients and customers may have when they walk through the doors. Merchandising set-ups and store layouts have been organized to help customers move through the space with intent and become more comfortable in the process. Additionally, the space is designed to encourage employees and customers to engage in conversations that enhance the shopping experience, whether through product recommendations or general education.

“Cannabist is not only a reflection of where we are now, and all of the markets we serve, but it is also a commitment to where we are going. We believe Cannabist will become a hub for all those who incorporate cannabis into their lives – regardless of what brought them to us. The Cannabist brand can grow with an ever-changing industry, continue to meet the needs of our patients and customers and serve as the platform for continuous innovation,” said Jesse Channon, Chief Growth Officer of Columbia Care. “By investing in this transition now, we will provide a new experience for our existing community and look forward to welcoming new customers who will come to see cannabis in a whole new light. The days of a transactional dispensary are nearing an end. As we see cannabis use continue to normalize, we will see the emergence of a more sophisticated, yet approachable dispensary model – starting with Cannabist.”

The Cannabist brand is supported by a team of national partners — Atlanta-based creative agency, 22Squared; New York-based architectural firm, METHOD Architects; Columbus-based visual merchandising firm, ZenGenius; and Massachusetts-based signage firm, Poyant Signs.

Debra BorchardtMarch 16, 2021

Columbia Care Inc. (OTCQX: CCHWF) reported financial and operating results for the fourth quarter and full-year ended December 31, 2020. Revenue rose 234% in the fourth quarter to $81.7 million versus $24.5 million for the same time period in 2019. The actual revenue was $76 million, which combined with the CannAscend revenue to lead to the $81 million. This beat the analyst estimates for $77.9 million in the quarter according to Yahoo Finance.

The net loss for Columbia Care in the fourth quarter was $73 million versus last year’s net loss of $28 million for the same time period. The earnings per share were for a loss of $0.21, which was much worse than the analyst expectations for a loss of $0.04 per Yahoo Finance.

Revenue for the full-year 2020 rose 151% to $197 million versus 2019’s revenue of $78.8 million. The company delivered a net loss of $133 million for 2020 versus a net loss of $102 million in 2019.

“We closed out 2020 with record results across key metrics, demonstrating the strength of our growth strategy and the potential of our expansive market portfolio,” said Nicholas Vita, CEO of Columbia Care. “We generated significant sequential and year-over-year growth across combined revenue, gross profit, and Adjusted EBITDA, as well as robust gross margin expansion. We have outperformed our 2020 outlook, solidifying our position as an industry leading MSO. Corporate profitability continued to expand as we further leverage our national scale. Including the full fourth quarter’s financial contribution of Project Cannabis, Columbia Care generated approximately $87M in Combined Revenue and $12M in Adjusted EBITDA.”

“In 2020, we expanded our footprint in the top two global cannabis markets with accretive acquisitions in California and Colorado. We generated strong organic growth in our existing markets and plan to capitalize on favorable regulatory tailwinds in medical markets that are converting to adult use across the country. With our footprint in 17 U.S. markets, three of which will become operational in 2021, we are well-positioned to take advantage of the tremendous opportunity for growth as cannabis adoption progresses.”

Outlook

The company’s outlook for 2021 was a pro format outlook which suggested revenue would be in the range of $500 – $530 million. Columbia Care’s pro forma 2021 outlook assumes the pending acquisition of GLeaf closes in the thirdquarter but does not include any contribution from future acquisitions nor does it assume any changes in the regulatory environment in markets where Columbia Care currently operates, such as the pending adult-use program in New Jersey. The outlook also excludes markets where a conversion from medical-only to adult-use is under consideration by the Governor and/or legislatures, such as New York and Virginia.

Vita added, “Our acquisition of Green Leaf Medical (GLeaf) remains on track to close in 3Q 2021 and is expected to expand our scale and vertically integrated footprint in four key, limited license markets – Maryland, Ohio, Virginia, and Pennsylvania, where we will become one of the largest fully-integrated operators in each state. We are also on track to open the first co-located medical and adult-use dispensary in Boston in 2Q 2021, and recently launched adult-use sales in Arizona. In 2021, we will leverage our vertically integrated national platform for key branding initiatives, both at the product level and in our stores. We will be rolling out several of our nationally-recognized, trusted brands across our markets and introducing a more approachable, more curated retail experience at our dispensaries to redefine the customer journey.”

Columbia Care said it ended 2020 with $61 million in cash and raised $140 million following the end of 2020.

StaffMarch 4, 2021

Columbia Care Inc. (OTCQX: CCHWF) released preliminary results for the fourth quarter and full year ended December 31, 2020 and issued 2021 guidance. Actual revenue rose 228% in the fourth quarter to $76 million versus $23 million for the same time period in 2019.

While this is a solid performance, it does miss the analyst estimates for revenue of $79 million in the fourth quarter according to Yahoo Finance. The combined results for the fourth quarter are listed as $81 million.

“Our record breaking fourth quarter and full year performance was driven by continued revenue growth and margin expansion. We generated robust sequential and year-over-year increases in Combined Revenue, Gross Profit and Adjusted EBITDA,” said Nicholas Vita, CEO of Columbia Care. “Including the full fourth quarter’s financial contribution of Project Cannabis, Columbia Care generated approximately $87M in Combined Revenue and $12M in Adjusted EBITDA. We have continued to see sequential revenue growth and margin improvements in the first quarter 2021, affirming Columbia Care’s position as the fastest growing top-tier multi-state operator.”

The company’s full-year 2020 actual revenue increased 132% to $179 million versus $77 million in 2019. The combined results for revenue were $197 million, which was a 151% increase over 2019’s $78 million.

The company’s guidance for combined revenue in 2021 is in the range of $500 million to $530 million. Columbia Care said this outlook assumes its pending acquisition of Green Leaf Medical closes in the third quarter, “ but does not include any contribution from future acquisitions nor does it assume any changes in the regulatory environment in markets where Columbia Care currently operates, such as the pending adult-use program in New Jersey. This also excludes markets where a conversion from medical only to adult use is under consideration by the Governor and/or legislature, such as New York and Virginia.”

Vita added, ““We effectively navigated the challenges of the COVID-19 pandemic and, in spite of those headwinds, delivered an exceptional year as we exceeded every milestone target set forth in our 2020 outlook. Highlighting our position as an industry consolidator, we closed key acquisitions with The Green Solution and Project Cannabis and announced the transformational acquisition of Green Leaf Medical, which remains on target to close in the 3 rd quarter of this year. Most notably, corporate profitability continued to expand as we further leverage our national scale.”

Debra BorchardtFebruary 11, 2021

Columbia Care Inc. (OTCQX: CCHWF) has entered into an agreement with Canaccord Genuity Corp. to purchase for resale, on a bought deal private placement basis, 2,800,000 common shares at a price of C$9.00 per share for aggregate gross proceeds of C$25,200,000. It is expected that the offering will be primarily sold to one large institutional investor. The deal is expected to close on or about February 25, 2021. The net proceeds will be used for working capital and general corporate purposes.

Credit Drawdown

The announcement comes days after equipment finance and leasing company XS Financial Inc. (OTCQB: XSHLF) said it had advanced approximately $3,200,000 to Columbia Care representing Columbia Care’s first and second drawdowns against the $5.0 million leasing facility announced on December 3, 2020. This second tranche has a term of 48 months.

At the time Joshua Snyder, VP Business Development of Columbia Care said, “This non-dilutive equipment financing from XS Financial provides us with increased flexibility and allows us to more quickly acquire and deploy cultivation and manufacturing hardware needed to increase our capacity in advance of market expansions and adult-use transitions. XS Financial has been a terrific partner ensuring that funding is properly matched to equipment needs at attractive rates, while freeing up our cash for acquisitions and other growth initiatives.”

David Kivitz, CEO of XS Financial said, “Our advances to Columbia Care demonstrate XS Financial’s ability to support industry-leading companies by rapidly deploying capital for equipment and CapEx. The amount announced today will finance the equipment Columbia Care needs for its operations in New Jersey, Virginia, Florida, and Massachusetts. We look forward to expanding our financing relationship with Columbia Care as they achieve significant growth and increase the depth of their nationwide footprint.”

West Virginia

The moves come on the heels of Columbia Care’s expansion into West Virginia. Just 10 days ago the company said it had been awarded five medical dispensary permits by the West Virginia Office of Medical Cannabis (“OMC”). Columbia Care said it currently holds one of only 10 cannabis processing licenses and one of 10 cultivation licenses, in addition to a hemp cultivation license. The OMC has also awarded a dispensary permit to Green Leaf Medical, the private cannabis multi-state operator that Columbia Care remains on track to acquire in Summer 2021 pending regulatory approval.

“We are grateful to the decision-makers in West Virginia, in particular the OMC, for selecting us to bring our high-touch patient-focused dispensary experience and premium product portfolio to best serve patients across West Virginia,” said Nicholas Vita, CEO of Columbia Care. “Being selected for up to six dispensary permits, as well as cultivation and processing licenses, is a great honor and enables us to pursue key retail and wholesale market opportunities within this limited-license state. In conjunction with our acquisition of Green Leaf, building out our vertically integrated West Virginia operations will further enhance our scale and footprint in the mid-Atlantic. We look forward to enhancing the lives of our West Virginia patients and, by doing so, solidifying our market-leading position in the region to continue to serve those who choose to include cannabis in their journey back to restored health and wellness.”

These permits will allow Columbia Care to operate retail dispensaries in the cities of Beckley, Fayetteville, Morgantown, St. Albans, and Williamstown, giving patients access to Columbia Care’s leading portfolio of pharmaceutical-grade products, and its wholesale partners, across the central and northern regions of the state. In addition, the company’s cultivation and processing capacity will also allow for a robust wholesale program that will bring Columbia’s products to the rest of the state. Green Leaf’s dispensary permit in Charleston will also deepen the company’s presence in the state’s capital and most populous city.

Debra BorchardtJanuary 8, 2021

After a slew of acquisitions, Columbia Care Inc. (OTCQX: CCHWF) entered into an agreement with Canaccord Genuity Corp. on a bought deal for 16,150,000 common shares at a price of C$8.05 per share for aggregate gross proceeds of C$130,007,500. The closing is expected to occur on or about January 13, 2021. The net proceeds will be used for working capital and general corporate purposes.

Acquisitions

Over the past few months, Columbia Care has been on a buying binge. Yesterday the company announced it was 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.

Earlier in December Columbia signed a definitive agreement to acquire Green Leaf Medical, LLC which is a privately held, fully-integrated cannabis multi-state operator (MSO) based in the mid-Atlantic region, for approximately $240 million with the potential for additional performance-based milestone payments. Green Leaf is one of the largest private MSOs in the United States and a market leader in the mid-Atlantic region with cultivation, extraction, processing, and retail operations across its four-state footprint. In addition to its dispensary footprint, Green Leaf also brings a leading wholesale market position in both Pennsylvania and Maryland, where its products are most widely sold under its nationally recognized gLeaf brand, including extracts and pre-rolls.

At the time CEO Nicholas Vita said, “This combination affirms Columbia Care’s position as one of the largest cultivators, manufacturers, and retailers in four key states – PA, VA, OH and MD – three of which are expected to convert from medical to adult use in the next 24 months. Green Leaf complements our retail footprint and brings wholesale leadership through which we can drive our portfolio of brands and unique products. The transaction is immediately accretive to gross margin, Adjusted EBITDA and Cash Flow from Operations. Ohio and Pennsylvania are already two of our top-performing markets by revenue and Adjusted EBITDA, and this transaction makes us one of the largest, most scaled wholesale and retail operators. In Maryland and Virginia, Green Leaf materially expands our wholesale footprint, retail dispensary network and the scope of our home delivery services. Acquiring Green Leaf immediately converts Maryland to an Adjusted EBITDA positive market. In addition, it accelerates our growth and profitability in Virginia, Ohio and Pennsylvania. No organization in the industry will be better positioned to serve patients and customers in the mid-Atlantic than Columbia Care.”

This was also at the same time Columbia closed its acquisition of Project Cannabis, a leading cannabis cultivator, wholesaler, and retailer based in Los Angeles, California. Total transaction consideration included approximately $52.5 million in Columbia Care stock and additional consideration of $16.5 million anticipated to be paid to the sellers from the proceeds of a subsequent sale of Project Cannabis’ real estate assets.

Debra BorchardtJanuary 7, 2021

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.

Debra BorchardtDecember 22, 2020

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Columbia Care Inc. (OTCQX: CCHWF) is buying privately-held Green Leaf Medical, LLC for approximately $240 million with the potential for additional performance-based milestone payments. Columbia will make a payment of $240 million, consisting of a cash payment of $45 million with the balance of $195 million being satisfied by the issuance of 43,900,144 common shares of the company. The deal is expected to close in the summer of 2021 and Columbia said the deal is immediately accretive.

By acquiring Green Leaf, Columbia said it substantially expands its footprint and operating scale in the East Coast and Mid-Atlantic. It adds roughly 400,000 ft of cultivation and production capacity, four operating dispensaries and six undeveloped, but permitted dispensaries, in key limited license markets. It also brings vertical integration in PA and MD and immediately positions Columbia Care as a leading wholesaler.

“This combination affirms Columbia Care’s position as one of the largest cultivators, manufacturers, and retailers in four key states – PA, VA, OH and MD – three of which are expected to convert from medical to adult-use in the next 24 months. Green Leaf complements our retail footprint and brings wholesale leadership through which we can drive our portfolio of brands and unique products. The transaction is immediately accretive to gross margin, Adjusted EBITDA and Cash Flow from Operations,” said Nicholas Vita, CEO of Columbia Care. “Ohio and Pennsylvania are already two of our top-performing markets by revenue and Adjusted EBITDA, and this transaction makes us one of the largest, most scaled wholesale and retail operators. In Maryland and Virginia, Green Leaf materially expands our wholesale footprint, retail dispensary network and the scope of our home delivery services. Acquiring Green Leaf immediately converts Maryland to an Adjusted EBITDA positive market. In addition, it accelerates our growth and profitability in Virginia, Ohio and Pennsylvania. No organization in the industry will be better positioned to serve patients and customers in the mid-Atlantic than Columbia Care. ”

Commenting on the acquisition, Philip Goldberg, Green Leaf’s CEO and Co-Founder, said, “Columbia Care is the ideal partner to take Green Leaf through its next phase of growth. In conjunction with its existing scale and market-leading strategy across its portfolio, Columbia Care’s dedication to ensuring optimal accessibility and product quality aligns with our values and will improve our ability to serve and expand our customer base throughout the mid-Atlantic.”

Kevin Goldberg, Co-Founder, General Counsel and President of Green Leaf added: “We are excited to have the opportunity to expand the gLeaf brand beyond the mid-Atlantic region, and our partnership with Columbia Care gives us the ability to accomplish this quickly and efficiently. As founders and shareholders, we’ve built one of the best organizations in the industry, and we wanted to partner with a like-minded company in terms of its mission, values and culture. We look forward to joining Columbia Care’s leadership team to capitalize on the many operational synergies across each of our markets and deliver unparalleled results.”

Debra BorchardtSeptember 9, 2020

Columbia Care Inc. (OTCQX: CCHWF) has signed an agreement to buy California-based Project Cannabis for approximately $57 million in Columbia Care stock and approximately $12 million in cash from the proceeds of a concurrent sale of Project Cannabis’ real estate assets. The deal is expected to close in the fourth quarter of 2020.

“Project Cannabis perfects our operating model in California, enables us to maintain supply chain continuity, optimize profitability and gives us the full suite of capabilities, products and brands needed to be a market leader in the state,” said Nicholas Vita, CEO of Columbia Care. “In addition to being immediately accretive to Columbia Care’s adjusted EBITDA and cash flow, Project Cannabis expands our portfolio of unique products, nationally recognized premium brands, wholesaling expertise, and adult-use knowhow, all of which are scalable into the rest of our US markets.”

Based, in Los Angeles, Project Cannabis owns the branded products Triple Seven and Classix. It operates a 32,000 ft cultivation facility, along with three adult-use retail dispensaries in prime locations in North Hollywood, Downtown Los Angeles, and Studio City. In San Francisco, it operates one adult-use retail dispensary in the Soma district, close to both professional baseball and basketball stadiums. This location also houses one of the only permitted consumption lounges in San Francisco.

The acquisition of Project Cannabis will enable Columbia Care to materially increase its scale throughout California and position its wholesale and manufacturing operations as one of the leading suppliers in the state. Going forward, Columbia Care’s new manufacturing facility in San Diego will manufacture and package all extracted products and concentrates for Project Cannabis. Leveraging its distribution network of more than 100 dispensaries throughout the state, Project Cannabis will continue to sell its entire brand portfolio while simultaneously cross-selling Columbia Care’s medically focused products, recently acquired products and brands from the TGS acquisition, and several new consumer-oriented product lines such as the Amber Live Resin portfolio, Columbia Care’s fastest-growing product in California.

Vita added, “The expected impact upon gross margins on targeted SKUs should be approximately +10% to 15%. At a price of approximately 1.3x current year revenue (excluding synergies), Project Cannabis is growing substantially faster than the overall market and materially adds to Columbia Care’s critical mass and scale in California, while immediately contributing to the state level and consolidated cash flow and Adj. EBITDA.”

“Although we have been approached by virtually every conceivable strategic partner, we believe our culture, focus on producing the highest-quality products through the most effective brand architectures and extensive distribution network aligns perfectly with Columbia Care’s vision to grow its footprint into the market leader in California,” said Project Cannabis EVP Cameron Wald. “Our team has done a tremendous job cultivating and building sought-after brands while making our Project Cannabis dispensaries trusted destinations for a consistently excellent retail experience. Together, we plan to immediately capitalize on synergies in our wholesale business and expand our product offerings by leveraging Columbia Care’s state of the art pharmaceutical-grade GMP manufacturing facility to accelerate our profitable growth.”

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