Phoenix-based Harvest Health & Recreation has reportedly offered $850 million (in stock) to acquire cannabis operator Verano Holdings. Obviously, the pickup of the Chicago-based company is a preemptive push to set up a foundation in the Illinois market as the state considers recreational marijuana legalization.
If this deal goes through, it will give Phoenix-based Harvest Health & Recreation the right to operate Verano’s local cultivation facility and their dispensaries in the state. In addition, Harvest & Health will have a base from whence they can expand operations into other states. This will add to Harvest Health & Recreation’s reach, as they already own cultivation facilities and/or dispensaries in five other states as well as trades on the Canadian Securities Exchange. By the end of this year, Harvest anticipates operation of more than 70 dispensaries as well as 13 cultivation facilities and 13 manufacturing facilities.
Regarding the deal, Harvest Health & Recreation CEO Steve White comments, “We wanted to make sure we were participating in a meaningful way before those conversations were at a crescendo. As that conversation starts moving forward, the price of assets in Illinois goes up.”
In addition, Harvest Health Executive Chairman Jason Vedadi explains, “The combination with Verano fits perfectly with our vision of creating the world’s most valuable cannabis company.” He goes on to note that this is an excellent opportunity to leverage each other’s strengths as well as improve continued shareholder value while simultaneously achieving the scale necessary to establish “a leadership position in one of the largest cannabis markets in the world.”
On the other side, Verano co-founder and CEO George Archos agrees that this is quite a good fit. He says, “This is a natural match between like-minded entrepreneurs who have built our companies from the initial facilities into two of the largest MSOs in the U.S., with an unwavering focus on operational excellence, superior quality products and service, and delivering value to customers and shareholders.”
He goes on to say that Verano’s growth and unique positioning in important markets will continue to support healthy expansion. And that is important because Verano is still only about a year old, formed out of the consolidation of several other cannabis operators.