Cresco Labs acquires Columbia Care to become “the leader in cannabis.”

Cresco Labs, one of the largest cannabis operators in the United States, announced Wednesday that it has reached an agreement to acquire Columbia Care for approximately $2 billion that will make it the largest multi-state cannabis company in the country.

Cresco Labs CEO Charles Bachtell said in a statement that “the combination of Cresco Labs and Columbia Care accelerates our journey to becoming the leader in cannabis in a way that no other potential transaction could.”

“We are incredibly pleased to announce this transformative transaction today at a very important time in the evolution of this industry. This acquisition brings together two of the industry’s leading operators, combining a leading presence with proven operational, branding and competitive excellence,” said Bachtell. “The combination is highly complementary and offers unmatched scale, depth, diversification and long-term growth. On a pro forma basis, the combined company will be the top-ranked cannabis company by revenue, the number one wholesaler of branded cannabis products, and the largest nationwide retail presence outside of Florida.”

“We look forward to welcoming the incredible team at Columbia Care to the Cresco Labs family. I couldn’t be more excited about this enhanced platform and how it advances Cresco Labs’ vision – to be the most important and influential company in the cannabis space,” he added.

Columbia Care CEO Nicholas Vita said the merger was guided by his company’s founding mission to “achieve the best outcome for our stakeholders.”

Columbia Care is “one of the largest and most experienced growers, manufacturers and distributors of cannabis products and related services licensed in 18 U.S. jurisdictions and the EU,” according to the companies’ press release Wednesday.

“In an evolving industry, opportunities to better achieve our mission through consolidation have led us to this historic moment,” Vita said in a statement Wednesday. “With Columbia Care’s strategic national presence in the most attractive markets and Cresco Labs’ success in execution and incredibly popular brands, together we will create the most important – and investable – company in cannabis. Getting to know Charlie, his team and the culture at Cresco Labs has given me a high level of confidence in our ability to successfully integrate Columbia Care and maximize the tremendous value of the combined footprint.” According to Marketwatch, “Cresco Labs stock fell 6%, while Columbia Care shares rose 1.3%” after the transaction was announced on Wednesday.

The still-burgeoning cannabis industry in the United States is already lucrative, but some market analysts have suggested that mergers like this will be necessary for companies to maximize profitability.

Owen Bennett, an analyst at Jeffries, told Marketwatch that he gives Cresco a “buy” rating.

“We see the combination creating a clear industry leader,” said Bennett. “The combined company will have best-in-class brands and wholesalers in most key states and a significantly improved margin profile.”

By creating the largest multi-state cannabis operator, the merger gives Cresco “the largest pro forma cannabis revenue today at over $1.4 billion,” the company said.

The company said it will also now have more than 130 retail stores in 18 different markets, making it the second largest retail presence in the industry.

And the company will now have the top position in four markets — Illinois, Pennsylvania, Colorado and Virginia — the second-largest share in Massachusetts and a “path to a top 3 position” in New York, New Jersey and Florida.

“The combined company will have a significant presence in today’s most influential markets,” the company said in its press release Wednesday, “and in the markets with the greatest tailwinds for growth and adult adoption, including:” New York, New Jersey , Virginia, Pennsylvania, Ohio, Maryland and Florida.