Wednesday, May 7, 2025

Cresco Labs and Origin House Amend Terms of Merger Agreement

Cresco Labs (CSE: CL) and Origin House (CSE: OH) this morning announced that the terms of their original merger agreement has been modified as was previously alluded to. Under the new terms, Origin House shareholders will receive 0.7031 shares of Cresco Labs for each share held. Previously, holders were to receive 0.8428 shares per share of Origin House.

The revised merger comes on the heals of a significant downtrend within the overall cannabis market. The revised pricing reflects the depreciation experienced by the sector in terms of asset values over the last several months.

With the revision of exchange ratios also comes the requirement that Origin House must raise C$39.60 million before the the transaction can be closed. The funds will be used to strengthen the balance sheet of the combined company. Cresco Labs has been notably short on cash of late, so this requirements comes with little surprise. Under the financing, 9.7 million Origin House shares are expected to be sold at a price of $4.08 per share, which is a significant discount to yesterdays close of $4.50 on the Canadian Securities Exchange. The financing is stated to be fully subscribed.

With the revised offering on a per share basis, Origin House will now have to go back to its shareholders to receive approval for the deal. The second meeting to seek approval from shareholders is expected to occur in December 2019, with the deal expected to finally close by mid January upon approval. Additional details related to the transaction are to be found within the management information circular that will be issued.

It is unclear at this time what, if any, other terms were amended as part of the amended agreement.

Cresco Labs closed yesterdays session at $8.45 on the CSE.


Information for this briefing was found via Sedar, Cresco Labs and Origin House. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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