Cresco Labs aims to become global cannabis leader with purchase of Columbia Care

As global demand for legal medical and recreational cannabis grows, industry players are pulling out all the stops to ensure they maintain an edge over their rivals. 

The competition is most certainly heating up, but this shouldn’t be a problem for Cresco Labs

Based in Chicago, Illinois, Cresco is planning on transforming into a worldwide cannabis leader by acquiring New York-based Columbia Care.

New York became the 15th U.S. state to legalize recreational cannabis use on March 31, when Governor Andrew Cuomo signed the New York State Marijuana Regulation and Taxation Act (“MRTA”) into effect.

However, due to the complexities of New York’s complex legal and regulatory program, statewide sales may not transpire for another few months.

About the merger between Cresco Labs and Columbia Care

Valued at $2 billion, the deal announced by American cannabis cultivator and processor Cresco Labs to purchase Columbia Care represents one of the biggest merger deals ever to take place in the cannabis sector.

Cresco’s merger with Columbia Care should be finalized by the end of this year. Once the merger is complete, Cresco’s footprint will extend across 17 states and the District of Columbia.

This is how you turn brands like High Supply, Cresco and FloraCal into Miller High Life, Coca-Cola and Johnnie Walker Blue Label,” Chief Executive Officer Charles Bachtell told interviewers at BNN Bloomberg as he highlighted some of Cresco’s brands.

Published reports suggest that Cresco’s estimated revenue will swell to $1.4 billion following the merger.

Shares of Cresco Labs dropped upon news of merger with Columbia Care

Although the outlook is promising, news of Cresco’s merger with Columbia Care didn’t look so promising from the perspective of a stock market trader. 

Why, you ask? Upon news of the merger, company shares tumbled from $6.54 to $5.82. Cresco’s shares closed at $5.91 on March 28, which is around 9.6% less than before the merger’s announcement.

On a lighter note, not only will the merger ensure Cresco becomes the largest cannabis MSO by revenue but also, the company will be acknowledged as the third-largest cannabis MSO by market value; trailing just behind Curaleaf Holdings and Green Thumb Industries.

Since the combined companies are expected to top more than $1 billion in annual revenue, it’s likely that investor interest will also peak after the acquisition is finalized.

Plus, Cresco Labs’ merger with Columbia Care presents investors with portfolio diversification, meaning that anyone who chooses to funnel their money into this stock may enjoy medium-long-term returns on their initial investment.