Cresco Labs Inc., one of the largest vertically integrated multistate cannabis operators in the United States, announced a significant expansion of its presence in Nevada and Arizona through the signing of a purchase agreement to acquire certain assets from Tryke Companies, a vertically integrated seed-to-sale cannabis company, including six Reef Dispensary locations in Nevada and Arizona, expanded licensed cultivation and process capacity in Las Vegas and Phoenix and entry into the Utah market.
“Tryke has proven itself to be one of the top operators in the U.S. and we look forward to welcoming Tryke’s seasoned team to Cresco Labs to work on growth and optimization initiatives together,” said Cresco Labs President and Co-founder Joe Caltabiano.
A few highlights from the transaction:
- The Transaction is expected to give Cresco approximately 8.11% market share in Nevada, estimated to be top 3 among all operators, a more than 300% increase in the Company’s market share in Arizona, along with access to a 12th state – Utah – via Tryke’s recent receipt of one of eight cultivation licenses in the state.
- Arizona is one of the largest medical-only markets in the U.S. with more than 210,000 registered patients and the majority of the state’s population is densely located in Phoenix, the 5th most populous city in the U.S. Arizona is expected to have an initiative on the 2020 ballot to legalize adult-use sales.
- The Transaction adds four (4) Reef Dispensary locations in Nevada in the cities of Las Vegas (2), Sparks and Sun Valley.
- The Transaction adds two (2) Reef Dispensaries in Arizona in Phoenix and Phoenix Southeast Valley.
- The Reef Dispensary in North Las Vegas generated US$14.5 million in revenue in the year-to-date period to August 31, 2019. This location also averaged over 2,300 tickets per day in August 2019, giving it the highest known monthly count in the state.
- Tryke’s in-house suite of branded products is one of the most successful and recognizable lines of products in the Nevada market currently.
- Cresco Labs currently sells the well-known and successful Mindy’s Edibles line in Nevada. Mindy’s has been one of the top 3 selling edibles in Nevada in 2019. The Transaction will enable the Company to accelerate its plans to introduce a full suite of Cresco Labs products into Nevada.
- Includes 27,000 square feet of cultivation and processing capacity in Phoenix, Arizona.
- Tryke also has a cultivation license attached to a 12 acre parcel in Spanish Springs, Nevada with a plan to open the 17,000 lb. per year Phase I build-out during 2020.
- View all highlights and full press release here.
Upon closing of the Transaction, as well as other pending transactions, Cresco Labs will have 25 production facilities and 29 retail dispensaries in operation with licenses to operate a total of 62 retail dispensaries across 12 states – Illinois, Pennsylvania, Ohio, Nevada, California, Arizona, Florida, New York, and Utah with Michigan, Maryland and Massachusetts pending approval. Upon closing of all pending transactions, the Company’s products will be on the shelves of over 725 dispensaries with a geographic footprint providing access to more than 154 million potential consumers, which is 71% of the estimated total addressable US cannabis market.