Cresco Labs, Columbia Care mutually terminate $2 bln merger (updated)

Cresco Labs

31/07/2023 13:46

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       July 31 (Reuters) - Cannabis company Cresco Labs  CL.CD 
and Columbia Care Inc  CCHW.NLB  said on Monday they have
mutually terminated the $2 billion merger announced in March
last year.
    "In light of the evolving landscape in the cannabis
industry, we believe the decision to terminate the planned
transaction is in the long-term interest of Cresco Labs and our
shareholders," said Cresco CEO Charles Bachtell in a statement.
    Cresco executives had said in March the combined entity has
the potential to be a brand as big as Coca-Cola or Johnnie
Walker, as the deal would help it dominate a market likely to
reach $46 billion in sales by 2026.
    Plagued by a lack of access to capital - marijuana remains
illegal at the federal level in the U.S. - and a thriving
illicit market, cannabis firms have seen billions wiped off
their market-caps since the highs in 2018. Canopy Growth
 WEED.TO  had raised doubts in June about its ability to
continue as a going concern.
    Additionally, the companies last month said they will not be
able to complete the divestitures necessary to secure all
necessary regulatory approvals to close the transaction.
    There are no penalties or fees related to the mutual
agreement to terminate the transaction, the companies said.
    

 (Reporting by Arshreet Singh in Bengaluru; Editing by Krishna
Chandra Eluri)
 ((Arshreet.Singh@thomsonreuters.com; Twitter: https://twitter.com/Arshreets;))