Chicago’s Cresco Labs buys Canadian cannabis chain for $823 million

Cresco Labs, a Chicago-based medical marijuana company, has agreed to purchase a Canadian cannabis firm in a $823 million deal.

Cresco Labs will gain the rights to 50 brands and more than 500 dispensaries from Origin House, which primarily operates in California, the companies said in a joint statement.

The deal is expected to be finalized in June. The acquisition allows Cresco Labs to expand its presence in the cannabis industry by focusing on California, the nation’s leading marijuana market.

“It’s an incredible platform for Cresco in California and the distribution infrastructure will provide a valuable framework to leverage as we scale our platforms in other states,” said Cresco Labs CEO Charlie Bachtell in a statement.

The merger will allow the combined company to own and operate licenses for 23 facilities, 51 retail locations and 725 dispensaries in 11 states.

“By partnering with one of the largest and most innovative U.S. multistate operators in existence today, Origin House will supercharge its growth and be in a position to offer its brand partners access to 10 additional states, with licenses and supporting infrastructure already in place,” said Marc Lustig, chairman and CEO of Origin House.

Cresco Labs recently completed a $120 million acquisition of a Florida marijuana company last month and purchased two Illinois dispensaries in December. The company debuted on the Canadian Securities Exchange last year.

“This significantly accelerates our efforts to build the first national house of brands with broad and deep positions in the largest cannabis markets in the country,” said Bachtell.

Cresco’s announcement follows recent expansion efforts and financial growth by other Chicago marijuana companies.

In March, Grassroots Cannabis announced it had raised $90 million in venture capital funding to fuel growth while Verano Holdings was acquired for $850 million by Phoenix-based Harvest Health & Recreation.

Last year, Medmen Enterprises purchased PharmaCann, one of the largest U.S. medical cannabis providers, for $682 million. At the time, the deal was considered the largest acquisition in the history of the cannabis industry according to the two companies.