Trulieve acquires Harvest Health & Recreation
The largest cannabis company in Florida and the largest cannabis company in Arizona are merging together in a massive deal that will create one of the largest cannabis companies in the United States.
Announced in May and subject to approval from regulators, Trulieve acquired Harvest Health & Recreation in an all-stock deal valued at $2.1 billion. When completed, the combined business will have operations in 11 states, including 22 cultivation and processing facilities with a total capacity of 3.1 million square feet and 126 dispensaries serving both the medical and adult-use recreational cannabis markets.
According to a press release from Trulieve, the new company will be the largest cannabis company in the United States in terms of footprint and one of the most profitable American multi-state operators, based on combining its 2020 adjusted EBITDA of $266 million with its 2021 consensus adjusted EBITDA of $461 million, rivaling current king Curaleaf.
“This combination offers us the opportunity to leverage our respective strong foundations and propel us forward with an unparalleled platform for future growth,” Trulieve CEO Kim Rivers said in a press release.
Trulieve also reported record revenues of $193.8 million for the first quarter of 2021, as well as a gross profit of $135.3 million, a gross margin of 70% and a net income of $30.1 million. It is the 13th consecutive profitable quarter for the company, which dominates the Florida medical market with a near-50% market-share on smokable flower, according to its website.
According to the latest report from Florida’s Office of Medical Marijuana Use, Trulieve currently has 82 retail dispensaries in the Sunshine State, more than the next two closest competitors — Surterra and Curaleaf — combined.
Harvest reported first quarter revenue of $88.8 million.
— Brian Beckley
Tilray-Aphria Merger Official
Following a vote from shareholders in late April, the Tilray-Aphria merger announced in December is finally official, creating an $8.2 billion company, based on the closing stock prices on April 30, 2021.
The blockbuster deal creates what the new company calls “the leading cannabis-focused consumer packaged goods company with the largest global geographic footprint in the industry.”
Tilray officials believe the merger will create operational efficiencies expected to generate $81 million in “pre-tax, cost-saving synergies” within 18 months, in the areas of cultivation and production, cannabis and product purchasing, sales and marketing and corporate expenses.
Aphria CEO Irwin D. Simon will be chairman of the new company’s board and will take over CEO duties from Brendan Kennedy, who led Tilray prior to the merger. Kennedy remains on the board of directors.
“Our global team is laser-focused on turning potential into performance and addressing consumer and patient needs for safe, innovative and high-quality products,” Simon said in a press release.
Tilray has operations in Canada, the United States, Europe, Australia and Latin America and its production platform supports more than 20 brands in more than 20 countries, including comprehensive cannabis offerings, hemp-based foods and alcoholic beverages.
In the United States, Tilray has a strong consumer packaged goods presence and infrastructure with two strategic pillars, including SweetWater, a cannabis lifestyle-branded craft brewer, and Manitoba Harvest, a pioneer in branded hemp, CBD and wellness products with access to 17,000 stores in North America.
— Brian Beckley