Cresco Labs has received regulatory approval for its acquisition of 100% of the membership interests of Gloucester Street Capital the parent entity of Valley Agriceuticals, via a merger between Gloucester and an indirect subsidiary of Cresco Labs. According to the company, Valley Ag holds one of the 10 vertically integrated cannabis business licenses granted in the State of New York by the New York State Department of Health. Each license gives the operator the right to operate one cultivation facility and four dispensaries in New York. Valley Ag’s license was recently renewed for a two-year period. The acquisition is expected to close by the end of August.
Valley Ag’s assets include four licensed dispensaries with operating locations in Bardonia and New Hartford along with new dispensaries scheduled to open in Williamsburg, Brooklyn and Huntington, Long Island within the next 14 days.
“We are very pleased to take the next step in building on of the most strategic and valuable geographic footprints in the cannabis industry,” said Charles Bachtell, CEO and Co-founder of Cresco Labs. “As the holder of one of only 10 vertically integrated businesses licenses in New York, we believe that Cresco Labs will make a significant impact in this large and influential market that is projected to grow to $500 million by 2022, according to Arcview/BDS Analytics. In virtually all consumer-related sectors and industries, New York is viewed as one of the most important markets in the world, which made it a critical component of our strategic geographic expansion plan. Having the opportunity to establish Cresco Labs in New York will significantly advance our goal to build the first national brand in the cannabis industry.
“The approval of this acquisition and the transfer of the license is a strong show of confidence by regulators that Cresco Labs can play a valuable role in helping the State of New York achieve the economic and social equity goals for its cannabis program. Our comprehensive national social equity and education initiative (SEED) demonstrates our strong commitment to driving positive social change and enabling all members of society to participate in the cannabis industry. We look forward to growing our New York operations, delivering a superior retail experience for customers, and providing individuals with the tools and education needed to be a part of the industry.”
“Cresco Labs has the best-in-class management team and we are excited to be a part of their effort to build the most important company in the cannabis industry,” said Steve Ashekian, CEO of Valley Agriceuticals. “Since signing the definitive agreement, we have been impressed with the guidance that the Cresco Labs’ team provided us on the plans for our 75,000 sq. foot cultivation and processing facility in Wallkill, New York and the opening of our four dispensaries. The cultivation facility is expected to be completed by the end of the first quarter of 2020 and will produce the full suite of Cresco Labs’ branded products. We are looking forward to leveraging Cresco Labs’ proven approach to winning market share as the patient base in New York continues to grow in the coming years.”
Currently, a medical-use only market, New York is the third-largest state in the US with nearly 20 million residents and approximately 105,000 certified patients. The State’s medical cannabis program has 15 qualifying conditions including chronic pain, post-traumatic stress disorder (PTSD), and opioid replacement.