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Cresco Labs Closes Acquisition of California Cannabis Firm Origin House
Monday 13 January 2020

13 January 2020 - Chicago, US-based cannabis company Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) has closed the acquisition of all issued and outstanding shares of California, US-based cannabis company Origin House (CannaRoyalty Corp.) (CSE: OH) (OTCQX: ORHOF), the company said.

Under the terms of the agreement, holders of common shares of Origin House will receive 0.8428 subordinate voting shares of Cresco Labs for each Origin House Share.

The transaction represents a total consideration of approximately CDN 1.1bn (USD 823.5m) on a fully-diluted basis.

Pursuant to the arrangement, Cresco will appoint Marc Lustig, chairman and CEO of Origin House, to the Cresco board of directors, following receipt of certain US regulatory approvals.

The transaction represents the largest public company acquisition in the history of the US cannabis industry. The combined entity will be: one of the largest vertically-integrated multi-state cannabis operators in the United States; a leading North American cannabis company, by footprint; and one of the largest cannabis brand distributors.

Cresco Labs said the acquisition of Origin House creates a presence in key cannabis markets through brand development and distribution.

It establishes Cresco Labs as the leading multi-state operator with one of the largest distribution platforms in California, which is projected to be a USD 7.7bn cannabis market in 2022 according to Arcview Market Research/BDS Analytics.

Cresco Labs is a differentiated grower, processor and retailer of premium cannabis operating across the United States.

The company focusses on entering highly regulated markets with outsized demand potential and strong regulatory structures.

Its impressive speed-to-market gives Cresco a distinct competitive advantage as it replicates its model to expand its national footprint.

Origin House is a growing cannabis brands and distribution company operating across key markets in the US and Canada, with a strategic focus on becoming a preeminent global house of cannabis brands.

Canaccord Genuity Corp. acted as financial advisor and Bennett Jones LLP acted as legal counsel to Cresco Labs. Cormark Securities Inc. acted as financial advisor and Norton Rose Fulbright Canada LLP acted as legal counsel to Origin House.
Date Published: 13/01/2020
Target: Origin House (CannaRoyalty Corp.)
Country: USA
Deal Size: .823m (USD)
Sector: Agriculture/Forestry
Type: Corporate acquisition
Financing: Stock
Status: Closed
Buyer: Cresco Labs Inc