US (CO): Cannabis operator enters Colorado with $140M acquisition

Columbia Care has entered into a definitive agreement to acquire The Green Solution (“TGS”), the largest vertically integrated cannabis operator in the State of Colorado, through a transaction initially valued at approximately $140 million, excluding certain performance based milestone payments.

Key Transaction Benefits Upon Closing
"The transaction increases Columbia Care’s US footprint to 93 facilities open or under development, including 74 dispensaries and 19 cultivation and manufacturing locations covering 15 jurisdictions in the US with an addressable population of over 155 million people," the team with the company explains. "This combines Columbia Care’s disciplined focus on execution and operations with TGS management expertise to ensure an orderly integration and to position Columbia Care for success in legalized adult-use markets."

"Additionally, the transaction expands the Company’s Columbia National Credit (CNC) offering by coupling the nation’s first legal cannabis credit card with TGS’s successful loyalty rewards program. It also accelerates profitability, and it increases LTM Q3 2019 pro forma revenue by $73.3 million or 112%, compared to Columbia Care pro forma revenue on a stand-alone basis."

Founded in 2010, TGS currently operates 21 dispensaries with two additional stores under development that are expected to open in 4Q 2019. "TGS also operates one of the country’s largest capacity, single site, automated manufacturing facilities that currently produces over 225,000 units of products every month. TGS’s substantial cultivation footprint encompasses three indoor grows totaling more than 250,000 sq ft, including a five-level, high-tech vertical grow, as well as 16,000 sq ft of greenhouse capacity located on its 140-acre outdoor cultivation complex. Combined, these sites are expected to yield more than 48,000 pounds of the lowest cost, highest quality indoor, outdoor and greenhouse flower in 2019 and nearly 150,000 pounds by 2023. TGS completed over 1.4 million retail transactions in 2018 and recognized revenue in excess of $73 million on a trailing twelve-month basis ending September 30, 2019. Additionally, The Green Solution has garnered more than 80 awards from cannabis competitions around the world and continues to be one of the most recognized heritage brands in the industry."

Management Commentary
“Since Columbia Care’s formation in 2012, we have distinguished ourselves by focusing on disciplined organic growth and return on invested capital, as well as prioritizing cash flow and emphasizing a corporate culture that consistently reflects our mission and values of service, innovation and quality. When it comes to M&A, we’ve been waiting for the right company, with the right people, in the right market, at the right price. Today, we are proud to announce that The Green Solution, whose founders built their company on the core principles of market depth, differentiated products, brands and capabilities, consumer satisfaction, and scalable infrastructure, will be our first major acquisition,” said Nicholas Vita, chief executive officer of Columbia Care.

Kyle Speidell, Co-President of TGS, added, “Given the success and reputation we have built over the last decade, we were approached by nearly every serious operator in the cannabis industry about a potential transaction. We are proud to have chosen Columbia Care, with its patient-centric, data-driven approach to health and wellness, as the ideal partner to trust with our family business. This deal allows us to provide Colorado consumers with Columbia Care’s unique portfolio of pharmaceutical-quality products, and also enables us to quickly expand our TGS brands into 14 new US jurisdictions.” Eric Speidell, Co-President of TGS, agreed, “Additionally, we can now bring Columbia Care’s market-leading advancements, including its CNC credit card, home-delivery service and e-commerce capabilities, to our customers in Colorado, further improving the concierge experience and the exceptional standards of customer service that we have worked so hard to establish. We are thrilled to have forged this partnership with Columbia Care as we head into our next stage of growth.”

For more information:
Columbia Care    

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