Cresco Labs, Columbia Care extend deadline for merger close to June

Reuters
·1 min read
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Feb 27 (Reuters) - Cannabis producer Cresco Labs Inc said on Monday that it has agreed to extend the deadline to complete its acquisition of Columbia Care Inc to June 30.

The $2 billion deal, announced in March last year, was expected to close on March 31.

After seeing a jump in sales during the early stages of the pandemic, the U.S. cannabis industry showed signs of slowing in the face of regulatory and economic challenges, including falling prices and an illicit market poaching its customers.

"Given the current divestiture and regulatory approvals timeline, we now expect closing to occur sometime before the end of June 2023," Cresco's Chief Executive Charles Bachtel said in a statement.

Cresco executives had touted the combined entity has the potential to be a brand as big as Coca-Cola or Johnnie Walker as the deal would help it dominate a market likely to reach $46 billion in sales by 2026.

Marijuana remains illegal at the federal level and the two large U.S. stock exchanges do not allow companies that grow or sell the plant to list their shares, despite calls for reclassification from several politicians, including President Joe Biden. (Reporting by Sourasis Bose in Bengaluru; Editing by Shailesh Kuber)