The Supreme Court of British Columbia has given the green light for marijuana company Harvest Health & Recreation (CSE: HARV) (OTCQX: HRVSF) to combine its business with Verano Holdings, one of the largest multi-state operators (MSO) of cannabis facilities in the U.S. The $850 million deal was first announced in March as one of the biggest mergers to date in the booming legal marijuana space.
The industry is undergoing consolidation as major companies look to establish a dominant footprint in North America and abroad. For example, Canopy Growth Corp. (TSX: WEED)(NYSE: CGC), the biggest pot company in the world by market cap, agreed in April to shell out $3.4 billion to acquire Acreage Holdings, a cannabis company with business in 20 states. In February, Tilray (NASDAQ: TLRY) jumped into the cannabidiol (CBD) market, spending $318 million to buy Manitoba Harvest.
Per the Harvest/Verano agreement, Harvest is paying the $850 million in its stock to become one of the largest vertically integrated MSOs in America. When the transaction is complete, Harvest will operate in excess of 200 facilities in 17 states, including approximately 130 retail dispensaries.
The combined company will have more than 150 product skews sold under its premium brands across over 150 retail locations and growing capacity nearing one million square feet throughout Nevada, Illinois and Maryland.
Harvest management expects that it will double its number of employees from 300 to 600 this year, with a focus on hiring women, minorities and veterans to fill new positions.
The news comes after the company disclosing on Monday that it acquired Arizona medicinal cannabis dispensary Leaf Life, which brings the only cannabis dispensary in Casa Grande under Harvest’s umbrella. On a buying binge in Arizona, the third largest medical marijuana market in the U.S., Harvest now has rights to operate up to 18 dispensaries and cultivation/processing facilities in the state.
Shares of HRVSF closed 1.2% lower on Monday at $5.95, while CSE-listed shares of HARV wrapped the day down 1% at C$7.80.