CHICAGO--(BUSINESS WIRE)--PRESS RELEASE--Cresco Labs, one of the largest vertically integrated multistate cannabis operators in the United States, has announced that it has reached a mutual agreement to terminate the purchase agreement dated Sept.16, 2019, to acquire certain assets from Tryke Companies, LLC.
Cresco Labs CEO and Co-Founder Charlie Bachtell said, “Our acquisition of Tryke has been impacted by regulatory delays, a decline in capital markets, and now COVID-19, which brought additional risk to this transaction. Given these events, we feel the resources previously targeted for this transaction are better invested in our existing markets, where we have high visibility and certainty of return on capital.”
Bachtell added, “The decisions we have made over the past year have de-risked Cresco, leaving us with one of the most experienced management teams, and one of the strongest balance sheets to deploy into our high-return, core markets. We know that times of uncertainty come with opportunity. Terminating the agreement puts Cresco in a position to better manage any potential future implications from COVID, take advantage of the current macro environment and succeed in achieving our goal of building the most important cannabis company in the U.S.”
The terminated agreement was for a purchase consideration of approximately US$282.5 million, including approximately US$55 million in cash. Cresco has agreed to pay equity valued at $1.25 million as total consideration for the termination of the agreement. With the termination of the agreement, Cresco has no outstanding acquisitions or major CAPEX obligations, leaving Cresco’s balance sheet unencumbered.