Friday, September 12, 2025

Cresco Labs

Cresco Labs Purchases Origin House With Tiny Premium Becoming One of the Largest MSOs

Today Cresco Labs announced they are acquiring Origin House for C$1.1B which works out to $12.68 per share. Not exactly a giant premium, but the combined entity will create arguably the largest cannabis company in the United States.

Origin House is a top distributor in California. The company offers a full suite of support services to transform cannabis products into strong California consumer brands. Origin House delivers over 50+ cannabis brands to more than 500 dispensaries in California, representing approximately 60% market penetration.

Shortly after the news release, Deep Dive correspondents reached out to two shareholders who had the following comments, “I’d say thanks if there were any premium…..unreal” and from another shareholder “F***** b****** premium”…

This is somewhat reminiscent of the the MPX/iAnthus merger where shareholders only received a 30% premium. Given this is an all-stock transaction, shareholders should do well from the synergies provided. The California market is very competitive and fragmented, for Cresco Labs to pick up a strong California operator to add to their large East Coast footprint, they now have most the majority of the US cannabis market covered.

Cresco Labs recently made noise when they announced the purchase of VidaCann in a $120 million cash and stock deal, one of the last remaining operators in the state of Florida. Which effectively gives Cresco Labs a footprint on par with any operator in the country. This is likely kicking off a competition to the top. In such a nascent industry, it is very difficult to question who is deploying their capital wisely, but in terms of national footprint, this acquisition makes sense for both shareholders. 

This represents over 100x trailing sedar based sales, but of course that would be an unfair metric. Or using the last quarters run rate, approximately 44x sales. And of course, the most recent sedar data is rarely reflective of a growing companies current run rate.

And one final interesting thought is that synergies will be picked up with the ability for Cresco to roll out the Origin House brands and services over all their nascent operations.


Information for this analysis was found via Sedar, Origin House and Cresco Labs. 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.

Video Articles

Avino Q2 Earnings: Steady As She Goes

MEG Energy: Cenovus Comes In With $7.9 BILLION Offer

Orla Mining Q2 Earnings: Musselwhite Changes Everything

Recommended

Northern Superior Expands Philibert With 350 Metre Step Out Testing 1.10 g/t Gold Over 25.5 Metres

Goliath Resources Hits 18.58 g/t Gold Over 5.00 Metres At Surebet

Related News

Cresco Labs – “Sort of” Reports Q2 Earnings

Last night, Cresco Labs (CSE: CL), released their unaudited financial results for Q2/19, well sort...

Thursday, August 22, 2019, 09:06:53 AM

Origin House Expects to Nearly Double First Quarter Revenues

Origin House (CSE: OH) announced preliminary revenue figures for the second quarter of 2019 today,...

Thursday, July 18, 2019, 11:07:06 AM

US Cannabis: Stifel Expects “Limited To No Sales Growth”

Earlier this month, Stifel-GMP came out with their US cannabis second quarter preview, calling the...

Monday, August 1, 2022, 01:17:00 PM

Stifel Reinitiates Coverage On Eight Cannabis Operators

Earlier this week, Stifel released a new report on cannabis operations, focused predominantly on US-based...

Friday, July 24, 2020, 03:30:00 PM

Cowen & Co Issues US Cannabis Update, Remains Bullish on Green Thumb, Cresco, Curaleaf

On the first of the month, Cowen and Co sent out an industry update specifically...

Sunday, September 6, 2020, 01:37:00 PM