March 2022, the Chicago-based cannabis company Cresco Labs announced a proposed acquisition of top multi-state cannabis operator Columbia Care. Today, Cresco Labs and Columbia Care announced a mutual agreement to terminate the $2 billion merger agreement.
Additionally, the definitive agreements dated November 4, 2022, to divest certain New York, Illinois, and Massachusetts assets of Cresco and Columbia Care to an entity owned and controlled by Sean “Diddy” Combs have also been terminated, effective July 28, 2023.
“In light of the evolving landscape in the cannabis industry, we believe the decision to terminate the planned transaction is in the long-term interest of Cresco Labs and our shareholders,” said Charles Bachtell, CEO and Co-founder of Cresco Labs. “We want to express our sincere gratitude to Columbia Care for their valuable collaboration and dedication during this transaction.”
“After careful consideration, we are confident in the mutual decision to move forward as separate, standalone companies,” said Nicholas Vita, CEO and Co-founder of Columbia Care. “This is the best path forward for Columbia Care’s employees, customers, and shareholders. We are thankful for the collaboration and partnership with the Cresco team throughout this extensive process. Over the last 16 months we have reviewed every aspect of our business, remained decisive and have made substantive changes that significantly improved our operations—positioning us with significant strategic and operational strength at this inflection point in the company’s history. We are looking forward to realizing the benefits of these changes as well as focusing on the opportunities in our outstanding footprint in markets with embedded upside.”
“Moving forward, we remain committed to our Year of the Core strategy, which involves the swift restructuring of low-margin operations, improving competitiveness and driving efficiencies in markets where we maintain leading market share, and scaling operations to prepare for growth catalysts in emerging markets,” said Bachtell. “A strong core will enable us to take advantage of the margin accretive, growth opportunities we foresee within this tough economic time for the cannabis industry. While this is not the outcome we originally hoped for, we are confident Cresco Labs is in a stronger position moving forward.”
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