Columbia Care signs definitive agreement to acquire Medicine Man, a rapidly growing, vertically integrated operator in the greater Denver area
The pioneering vertical operator will significantly strengthen Columbia Care’s position as a leader in the world’s second largest cannabis market
- Immediate increases in Columbia Care’s Gross Margin, Adjusted EBITDA, and Free Cash Flow
- Adds four retail locations and a 35,000 square foot grow facility that produces approximately three million grams of dried flowers annually, all of which are sold through Medicine Man stores
- The transaction is expected to close in the 4th quarter of 2021
NEW YORK, June 15, 2021 – (BUSINESS WIRE) – Columbia Care Inc. (NEO: CCHW) (OTCQX: CCHWF) (FWB: 3LP) (“Columbia Care” or the “Company”), one of its largest and most well known experienced US cannabis breeders, manufacturers and distributors announced today that they have entered into a definitive agreement to acquire Medicine Man Denver (“Medicine Man”), a leading vertically integrated cannabis company serving the greater Denver area. since 2009.
The Medicine Man acquisition consolidates Columbia Care’s position as a scaled retailer, breeder and manufacturer in Colorado, the world’s second largest cannabis market. Medicine Man outperforms the broader Colorado market, with sales growing 42 percent in 2020 versus 24 percent for the state and 64 percent year-to-date through May versus 25 percent for the state. The acquisition adds a cultivation facility and four dispensaries to Columbia Care’s national presence, including a shared adult and medical facility and three adult facilities.
“We have great admiration for what Medicine Man executives, Sally Vander Veer and Andy Williams, have built over the past 12 years through their tireless leadership, local and state advocacy, and exceptional business acumen and vision,” said Nicholas Vita, Columbia Care CEO.
Medicine Man will further cement our position as the leading vertically integrated operator in Colorado along with our ongoing integration of The Green Solution and have a positive impact on our financial performance in the years to come.
Nicholas Vita, Columbia Care CEO
We are also confident that the strong value alignment between our two companies will help Columbia Care continue its growth in Colorado in a sustainable and responsible manner. We’re excited to add one of Colorado’s longest-running and most respected cannabis companies to the Columbia Care family.
Medicine Man brings a very experienced and talented team of executives and employees who further strengthen Columbia Care’s strong talent pool. The company’s founders and management team pioneered the legal cannabis industry in Colorado and over the past 12 years have built a widely respected, highly profitable business that has gained strong loyalty from both its customers and employees. Because of this, Medicine Man has received numerous awards as the best retailer, employer and breeder.
Since 2009, the Medicine Man family has helped propel the Colorado cannabis industry. We have done this responsibly and energetically, for our customers, employees and our family. Our industry is changing and growing faster than ever today. We recognize the need to work with others to continue to compete and to change the industry responsibly as it grows.
Andy Williams, President and Co-Founder of Medicine Man
We are proud to join our business with Columbia Care, a true leader in this next phase of growth in the cannabis industry. Made up of people with family business values, Columbia Care has the power to lead the cannabis industry into the future. We are very happy to be part of this new team.
“Medicine Man is excited to announce our partnership with Columbia Care,” said Sally Vander Veer, CEO of Medicine Man. “You are an ideal partner and I am confident that you will be able to maintain the higher standards that our family-run growers and pharmacies have built over the past twelve years. I knew this opportunity was the right choice for our family and employees because of our shared commitment to operational excellence, emphasis on people and culture, and a customer-centric mentality. I’m looking forward to a seamless integration and an exciting next chapter of growth and success. “
The $ 42.0 million upfront payment, consisting of $ 8.4 million in cash and $ 33.6 million in shares, is a multiple of approximately 4.5 times the projected EBITDA for 2021. The Transaction terms also include a possible additional milestone payment in 2022 if certain performance targets are met.
Foley Hoag LLP is serving as legal advisor to Columbia Care. Right Side Advisory Services is serving as financial advisor to Medicine Man. Husch Blackwell LLP is serving as legal advisor to Medicine Man.
About Columbia Care
Columbia Care is one of the largest and most experienced breeders, manufacturers, and providers of cannabis products and related services licensed in 18 US jurisdictions and the EU. Columbia Care currently operates 122 facilities¹ including 92 pharmacies and 30 cultivation and manufacturing facilities. Columbia Care is one of the original medical cannabis suppliers in the United States and continues to provide industry-leading products and services. The company launched Cannabist, its new retail brand, and created a national pharmacy network using proprietary technology platforms. Through its pharmacy network, the company offers products that include flowers, edibles, oils and tablets, and makes popular brands such as Seed & Strain, Triple Seven, Classix, Plant Sugar, Press, Amber and Platinum Label CBD. Columbia Care is known for setting the standard for compassion, professionalism, quality, care and innovation in the fast growing cannabis industry. More information about Columbia Care can be found at www.col-care.com.
1 pro forma facilities either open or under development; includes facilities where Columbia Care provides advisory services under the terms of an administrative service agreement
Original press release
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