Trulieve Cannabis Corp. to acquire Harvest Health And Recreation Inc. valued at $ 2 billion

Florida-based Trulieve Cannabis Corp. announced Monday that it has reached an agreement to acquire Arizona-based Harvest Health and Recreation Inc. in an all-stock deal valued at approximately $ 2.1 billion. The transaction creates a company with a combined presence in 11 states that Kim Rivers, CEO of Trulieve, describes as “the largest and most exciting acquisition in our industry that creates the most profitable multistate public operator”.

“This combination gives us the opportunity to leverage our respective strong foundations and advance ourselves with an unprecedented platform for future growth,” Rivers said in a statement from Trulieve. “Harvest gives us an immediate and significant presence in new and established markets and accelerates our entry into the adult arena in Arizona. Trulieve and Harvest are leaders in our markets and are known for their innovation, brands and operational expertise with true depth and size in our businesses. “

Under the terms of the Transaction, Harvest shareholders will receive 0.1170 of one subordinated voting interest in Trulieve for each subordinated voting interest in Harvest. The exchange rate for Harvest shares indicates a price of $ 4.79 per share, a 34% premium over Friday close of trading for shares in the company.

Deal expands Trulieve’s growth

Trulieve is a cannabis multistate operator (MSO) with offices in the Northeast and Southeast, while Harvest’s business is concentrated in the Southwest, West Coast and Northeast. The combined company will license cannabis operations in 11 states, including 22 cultivation and processing operations with a total capacity of 3.1 million square feet and 126 pharmacies selling cannabis for medicinal and recreational purposes. Harvest is also a shareholder in Hightimes Holdings Corp., the parent company of the High Times.

Steve White, the CEO of Harvest, said his company is excited to be part of Trulieve. He noted that “unmatched successes and magnitudes have been achieved in his home state of Florida”.

“As one of the oldest multi-state operators,” said White, “we believe our track record in identifying and developing attractive market opportunities combined with our recent launch of adult sales in Arizona will add tremendous value to the combined organization becomes.” it grows and continues to grow in the years to come. “

The deal was unanimously approved by the boards of Trulieve and Harvest. In addition, Harvest shareholders, who represent more than 50% of the voting rights of the issued and outstanding Harvest shares, have entered into an agreement with Trulieve to support the transaction.

The deal supports Trulieve’s expansion into core markets like Florida, Maryland and Pennsylvania, and sets up a hub in the Southwest to serve key markets like Arizona, where voters legalized adult cannabis recreational use in last November’s general election. The combined company will hold a leading market share in both Arizona and Florida.

Morgan Paxhia, co-founder and managing partner of Poseidon, one of the longest-running mutual funds in the cannabis sector, told High Times in an email that Trulieve’s acquisition of Harvest was an ongoing trend in mergers and acquisitions (M&A) in the Cannabis industry continues.

“This combination creates a multi-state operator that is expected to have sales of over $ 1 billion in 2021. It is clear that the majority of the short-term growth and overall addressable market is in the US, but we need SAFE Banking to support our industry and companies of this size, ”said Paxhia. “Cannabis is growing and M&A deals of this size are another important data point on its growth path. Trulieve’s acquisition of Harvest creates a new tier of multi-state operators with expected sales of more than $ 1 billion in 2021. “