Select Page

420 with CNW — Marijuana Companies Columbia Care, Cresco Labs Announce Termination of Proposed Merger

Cannabis News Wire, Media Partners

This post is presented by our media partner Cannabis News Wire

View the original article here.

image

Marijuana producers Columbia Care Inc. and Cresco Labs have announced the termination of a $2 billion merger between the two companies. First announced in March 2022, the merger would have seen Cresco Labs buy Columbia Care for $2 billion in an historic deal that would have resulted in the largest marijuana producer in the country. Executives from Cresco noted at the time that the resulting company had the potential to be as large as Johnnie Walker or Coca-Cola and dominate the increasingly lucrative cannabis industry.

The merger was a major bet on the growth and future of the cannabis industry. However, it appears that executives from both companies don’t see the merit of making any big bets in the sector. Cresco Labs CEO Charles Bachtell said that due to recent developments in America’s state-legal marijuana industry, company leaders terminated the merger to protect the company’s and shareholders’ long-term interests.

Cannabis may be generating billions of dollars in revenue per year, but players in the sector regularly deal with a myriad of issues that threaten their profitability and make it incredibly hard to operate in the cannabis market. For instance, due to federal prohibition, the sector has barely any access to financial institutions and cannot rely on banks to facilitate contactless payments. This has led to many cannabis operators relying on a cash-only basis and increased the risk of violent robberies in retail cannabis establishments.

Limited efforts by lawmakers to pass cannabis banking legislation coupled with a recent announcement from MasterCard banning the use of its cards for cannabis-based transactions means that cannabis operators won’t be facing a reprieve from their banking-related issues any time soon.

Investing in a major merger at a time when the industry has limited access to a critical resource such as banking and is still waiting for congressional reform (which could take years), doesn’t seem like a good idea in the near-term.

Cresco Labs and Columbia Care have also discontinued a deal with entertainment mogul Sean Combs to invest an estimated $185 million in the acquisition of divested operations in Illinois, Massachusetts and New York. The two companies said that they will face no termination-related fees or penalties as the decision to terminate the merger was mutual.

The cancellation of their merger underscores the weaknesses currently facing America’s struggling cannabis industry.

According to Bachtell, the industry is currently going through a “tough economic time” and Cresco would be better served focusing on its core business. These tough economic conditions could also be impacting the operations of numerous ancillary entities, such as Advanced Container Technologies Inc. (OTC: ACTX), which do significant business with marijuana operators.

NOTE TO INVESTORS: The latest news and updates relating to Advanced Container Technologies Inc. (OTC: ACTX) are available in the company’s newsroom at https://cnw.fm/ACTX

About CNW420

CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of two informative articles each business day. Our concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. Articles are released each business day at 4:20 a.m. and 4:20 p.m. Eastern – our tribute to the time synonymous with cannabis culture. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.

To receive instant SMS alerts, text CANNABIS to 21000 (U.S. Mobile Phones Only)

For more information please visit https://www.CNW420.com

Please see full terms of use and disclaimers on the CannabisNewsWire website applicable to all content provided by CNW420, wherever published or re-published: http://CNW.fm/Disclaimer

Do you have questions or are you interested in working with CNW420? Ask our Editor

CannabisNewsWire420
Denver, Colorado
http://www.CNW420.com
303.498.7722 Office
Editor@CannabisNewsWire.com

CNW420 is part of the InvestorBrandNetwork.

This post was originally published by our media partner here.

Grow Up Toronto – May 27-29, 2024
Delta Hotels Toronto Airport & Conference Centre

Grow Up Alberta – Sept. 29 – Oct. 1, 2024
Edmonton Convention Centre • Edmonton, AB