Cresco Labs (CSE: CL) is the newest market entrant to the state of Florida. The company this morning announced the entrance with the news that the company will be acquiring that of Bluma Wellness (CSE: BWEL.u) in an all-stock transaction that values Bluma at US$213 million.
The transaction will see Bluma shareholders receive 0.0859 of a subordinate voting share of Cresco Labs for each Bluma share held. The ratio implies a valuation of US$1.12 per Bluma share, a premium of 29% to the closing price of Bluma as of last night. Provisions are also in place to increase that ratio, should the price of Cresco Labs fall prior to closing the transaction.
The transaction will see Cresco enter the third most popularous state in the country, which currently has nearly half a million registered patients in its medical cannabis program. Bluma presently operates under the One Plant Florida banner, with seven dispensaries currently in operation and a further eight locations under control and currently slated to open. The small operator currently boasts the second highest in per-store sales of smokable flower, grown in its 54,000 square foot cultivation facility.
The transaction is currently slated to close in the second quarter of 2021, following approval from Bluma shareholders as well as regulatory and court approvals. Further, the board of directors of Bluma have determined that the transaction is fair from a financial perspective to Bluma shareholders.
Cresco Labs last traded at $16.59 on the CSE.
Information for this briefing was found via Sedar 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. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.