Cannabis Leader Curaleaf Makes a Major Expansion Play

The largest cannabis company in the country, Curaleaf(CURLF), plans to acquire Bloom Dispensaries in its efforts to grow its Arizona market.

As part of an all-cash deal valued at $211 million, the Wakefield, Mass.-based Curaleaf committed to purchasing the Arizona-based marijuana dispenser and two processing facilities Phoenix and multiple dispensaries in Tucson, Peoria, and Sedona.

The deal is expected to close in January 2022 after regulator approval.

Curaleaf Has Big Expansion Plans

The move is part of Curaleaf's larger plan to expand its reach in different parts of the country and Arizona in particular — the Bloom acquisition will bring it up to 16 dispensaries in Arizona and 128 across the country.

It chose Bloom, which is expected to generate $66 million in revenue and EBITDA margins of more than 40%, for its "attractive financial profile."

"Bloom has built a strong and profitable business, and we believe the combination of our two companies will enhance our competitive position and ability to continue gaining share in the highly attractive Arizona market," Curaleaf CEO Joseph Bayern said in a press statement.

How Is Curaleaf Paying for the Deal?

Curaleaf will initially pay out $51 million in cash at closing. For the rest, it signed promissory notes of $50 million, $50 million, and $60 million due on the first, second, and third anniversary of the close.

News of the acquisition has not had an upward effect on the company's value. Curaleaf is 34.33% to $8.48 year-over-year and down 2.59% since this morning.

"In addition to bolstering our strong position in this key growth market with an attractive portfolio of retail and cultivation assets, Bloom will be immediately accretive to our adjusted EBITDA margins upon close," says Curaleaf Executive Chairman Boris Jordan.