Harvest Health Cancels $850 Million Verano Acquisition, Closes Franklin Labs DealMarch 31, 2020
Tempe, Arizona-based Harvest Health & Recreation has abandoned its $850 million acquisition of Illinois-based Verano Holdings, originally announced last March. Harvest cited “prolonged obstacles in meeting requirements for state and local regulatory authorities needed to transfer ownership and operational licenses, adverse capital market conditions, and a challenging environment for asset sales” as contributing to the decision. No termination fees are owed by either party.
“Given the persistent challenges in consummating this deal and current market conditions, both companies felt it was prudent to move forward separately at this time,” said Harvest CEO Steve White.
Instead, Harvest announced the closing of its acquisition of Franklin Labs, a subsidiary of CannaPharmacy, for approximately $25.5 million. The acquisition includes a 46,800-square-foot cultivation and manufacturing facility in Reading, Pennsylvania and will be paid for with $15.5 million in cash and a $10 million promissory note. Pending approvals, Harvest plans to expand the existing cultivation operation this year and manufacturing operations are projected to begin next quarter. While Harvest and Harvest-affiliated entities own five retail dispensaries in Pennsylvania, this will be the company’s first cultivation center there. It’s expected to be a significant supplier to Harvest’s own retail operations and other retailers across the state.—Danny SullivanSubscribe 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.