Curaleaf to Acquire Acres Cannabis, Expand into Nevada

Curaleaf to Acquire Acres Cannabis, Expand into Nevada
Image: New Curaleaf Cannabis Location / Credit: Curaleaf

Curaleaf Holdings (CSE: CURA) (OTCQX: CURLF) has agreed to acquire Acres Cannabis, a cannabis company serving the Nevada market.

The company has 269,00-sq.-ft. of operating cultivation facilities on its 37 acres of land in Amargosa Valley, Nevada. It operates the state’s largest cultivation facility, a production and extraction lab and a cannabis dispensary located in the city of Las Vegas, adjacent to the Strip, with a second dispensary under construction.

Under the terms of the agreement, Curaleaf will pay $70 million to buy Acres. The purchase price consists of $25 million in cash, $45 million in shares and additional consideration to be paid if certain financial targets are exceeded.

The deal is subject to certain conditions and is expected to close in 2019.

Joseph Lusardi, CEO of Curaleaf, stated, “The Acres acquisition is a major step in expanding our vertical platform in Nevada. Acres operates a flagship dispensary in the heart of Las Vegas, complementing our existing assets in the state extremely well, and importantly, we can control the consistency, quality and production cost of our own cannabis products.”

Curaleaf says that the Acres’ cultivation platform will provide 42,000 sq. ft. of functioning climate-controlled greenhouses and 227,000 sq. ft. of outdoor cultivation in Amargosa Valley. The site is currently under construction, adding another 133,000 sq. ft. of capacity.

At more than 400,000 sq. ft., the facility is expected to generate 100,000 pounds of dry flower per year at full scale. During the fourth quarter of 2018, Acres harvested more than 5,000 pounds of flower.

Acres also operates a 19,000 sq. ft. dispensary in Las Vegas, Nev. The cannabis experiential store is open 24 hours a day, 7 days a week, and hosts America’s first marijuana farmers market every weekend.

The company has a second dispensary in Ely, Nev., currently under construction and scheduled to open later this year. All facilities offer a museum and open view processing kitchen where customers can view the processing of edibles and extracts.

John Mueller, CEO of Acres, believes that “Curaleaf is very well positioned to continue to be the largest cannabis operator in the U.S. giving our partners significant upside.”

What’s Next

Curaleaf plans to start operating Acres dispensaries as the Curaleaf brand by year-end. The company wants to become the largest operator of single-branded dispensaries in the U.S.

The Acres acquisition will increase Curaleaf’s cultivation and manufacturing operations from which Curaleaf will supply its own flagship dispensary in Las Vegas, scheduled to open in the second quarter of this year.