Cannabis Briefs for June 18, 2019June 18, 2019
•Vertical Companies, a California cannabis brand producer and distributor, will acquire the newly formed cannabis holding company Umbrla for $462.5 million. Umbrla is in the process of consolidating several specialized cannabis subsidiaries in California, Oregon, Nevada, Arizona, and Oklahoma that cumulatively generated over $32 million in revenue in 2018. This will extend Vertical’s production and distribution reach outside California and put the combined company on track to reach nearly $100 million in cannabis revenue this year. Smoke Wallin, Vertical’s chairman, stated, “This will be a transformative transaction for our combined businesses. Umbrla is assembling a terrific group of brands with distribution in more than 700 stores. Combined with our back-of-house seed-to-sale infrastructure investments and large portfolios of unique brands, it makes for a powerful and scaling growth business.”
•Gross sales of cannabis in Massachusetts totaled nearly $140 million between the beginning of sales last November and the end of May, according to data released by the Massachusetts Cannabis Control Commission. Sales have grown every month, from $12.8 million in December—the first full month—to $33.5 million in May. In the week beginning May 20, the state averaged sales of $1.3 million per day on average transactions of $44.30. During that week, 50% of product units sold were flower while edibles and concentrates combined for another 40%. According to the state’s count, nearly 2,000 people are employed in the industry there.
•Grocery chain Kroger plans to begin selling CBD products in 945 stores in 17 states. Like similar plans at Walgreens, CVS, and others, Kroger will stock primarily CBD-infused topicals like creams, balms, and oils; CBD food items will not be sold. Kroger will sell the products in Arizona, Arkansas, Colorado, Illinois, Indiana, Kansas, Kentucky, Michigan, Missouri, Nevada, Oregon, South Carolina, Tennessee, West Virginia, Washington, Wisconsin, and Wyoming. Kroger is the largest grocery chain in the U.S.
•Shareholders for cannabis distributor and brand developer Origin House voted last week in favor of Cresco Labs’ proposed acquisition of the company. However, the U.S. Justice Department’s Antitrust Division has filed a request for additional information regarding the merger. The request extends the waiting period for closure of the deal for up to 30 days after Cresco and Origin House submit the documentation in question. Though a relatively small Canadian player, Origin House is established in the California market, distributing 50 brands to 450 licensed retailers. The companies still expect to finalize the deal in the coming months.Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning. You will also receive the Cannabis edition as part of your subscription.