Cresco Labs (CSE: CL) announced this morning that it had received regulatory approval to proceed with its asset purchase in the state of New York. The acquisition is for one of ten currently issued vertically integrated cannabis licenses within the state.
The acquisition, for the assets of Gloucester Street Capital, LLC, will occur between an indirectly subsidiary of Cresco and that of Gloucester Street Capital. The firm currently has cultivation and processing assets under construction, which are anticipated to be 75,000 square feet in size upon completion. Completion is expected to occur in the first quarter of 2020.
Gloucester, through its subsidiary Valley Agriceuticals, currently has two dispensaries open in Bardonia and New Hartford. It is expected that two additional locations will be opened within the next two weeks as well, which are located in Brooklyn and Long Island. Once open, Cresco’s New York operations will be at full retail capacity.
The transaction between Cresco Labs and Gloucester Street Capital dates back to before Cresco was a public entity. The transaction was originally listed in the firms listing statement, identifying that the purchase price of the assets consist of US$32.5 million in cash and 13,466,667 Class F units in Cresco Labs, in exchange for 100% of Gloucester Street Capital.
No timeline was given on the expected closing date of the transaction now that the deal has received regulatory approval.
Meanwhile, Cresco Labs is still awaiting regulatory approval in relation to its planned acquisition of Origin House (CSE: OH) of California. The Department of Justice had asked for additional information back in June, known as a Second Request, to which both entities are believed to have since responded to. Recent Form 7 filings on the Canadian Securities Exchange by both Origin House and Cresco Labs have identified little progress has been made towards closing the deal in the time since. While Origin recently disposed of Florida assets in relation to the deal, Cresco failed to comment on the matter entirely within its filings.
That deal was anticipated to close by the end of June but was delayed in part due to the Department of Justice, who is determining whether or not the transaction violates anti trust laws.
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.
