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With Origin House Deal, Cresco Labs Targets California Market

April 9, 2019

In a major deal announced last week, Chicago, Illinois-based mixed medical and recreational cannabis company Cresco Labs is set to pay C$1.1 billion ($823m) to buy Ottawa-based Origin House in an all-stock deal. With the acquisition, Cresco gains access to Origin House’s large distribution platform in the California market.

Origin House, formerly known as CannaRoyalty, is a Canadian cultivator and distributor with a portfolio of more than 50 cannabis brands. The company became a major player in California a year ago when it acquired River Distribution (RVR)—which handles a number of premium California brands—along with edibles producer Kaya Management and medical marijuana company Alta Supply. RVR was founded by longtime drinks wholesale executive Ted Simpkins and distributes brands like Humboldt’s Finest, Cheech’s Private Stash, and Good Stuff Tonics, among others, to more than 500 California dispensaries. As a result, Origin House is both a vertically integrated producer, manufacturer, and distributor in Canada, and a sizable distributor in California.

California will be the eleventh state where Cresco operates, as it runs 15 production facilities and 51 retail locations, mostly in Illinois, Pennsylvania, and Massachusetts. The acquisition of Origin House transforms Cresco into a player in both California and Canada and positions the boutique brands it now manages for major expansion. Pending regulatory approval, the sale is expected to be completed by the end of June.—Danny Sullivan

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