WAKEFIELD, Mass., May 17, 2021 – PRESS RELEASE – Curaleaf Holdings Inc., an international provider of consumer products in cannabis, signed definitive documents to acquire the Los Sueños Farms and its related entities, the largest outdoor grow in Colorado. This will significantly expand Curaleaf's Colorado presence, vertically integrating in the state with large-scale outdoor cannabis cultivation. The proposed transaction includes three Pueblo, Colorado outdoor cannabis grow facilities covering 66 acres of cultivation capacity, including land, equipment and licensed operating entities, an 1,800-plant indoor grow and two retail cannabis dispensary locations serving adult-use customers.
Total base consideration for the proposed acquisition is approximately $49 million for the Los Sueños operating companies and $18 million for the real estate and farm assets. Total consideration of $67 million to be paid 61% in Curaleaf subordinate voting shares, 29% in cash at closing, and 10% in assumed debt maturing in five years. Additional contingent consideration of up to $8 million in stock will be paid based upon operating cash flow-based targets for 2022.
"We are excited to be a part of such a diversified company and look forward to being an accretive team member immediately," Bob DeGabrielle, owner and founder of Los Sueños, told Cannabis Business Times.
RELATED: Ag-Tech and Precision Farming Drive Innovation at Los Sueños Farms: Los Sueños Farms owner Bob DeGabrielle had visions of improving people’s lives through cannabis, and now he oversees one of the U.S.’s largest outdoor cannabis farms that relies on ag-driven technology and processes to produce at scale.
Curaleaf Executive Chairman Boris Jordan said, "The acquisition of Los Sueños provides Curaleaf with outdoor cannabis cultivation expertise at commercial scale and establishes our foothold in the $2.2 billion Colorado market. This deal furthers our strategy of constructing low-cost supply chains that will secure healthy margins and position us for interstate commerce when it comes. Ultimately, our goal is to cultivate cannabis at less than $100 per pound, and this acquisition is a significant step in the right direction."
The acquisition will complement Curaleaf's existing Colorado presence through its Select brand. Select is known as America's No. 1 cannabis oil brand, with a variety of best-in-class cannabis products distributed to nearly 2,000 locations across 18 states.
Curaleaf CEO Joseph Bayern said, "The acquisition of Los Sueños will add over 50,000 pounds per year of low-cost wholesale capacity to Curaleaf's footprint in Colorado, which we intend to double to over 100,000 pounds, representing a significant market share. As the largest producer of biomass in the state, this facility will also fuel the further deployment of our Select product line, which can already be found in 230 independent dispensaries in the state."
The proposed transaction has been unanimously approved by the Curaleaf board of directors and is expected to close upon regulatory approvals.