Portland based Cura Cannabis was sold on Wednesday for more than $1 billion in an all stock transaction, the biggest deal ever made among the American companies operating in the legalized marijuana industry.
Cura operates in California, Arizona and Nevada. It sells cannabidiol at wholesale prices and retail market under the Select brand. It is one of the most prominent players in the CBD industry with humongous turnovers and backend processing.
Curaleaf Holdings, the buyer is a Massachusetts company, whose shares trades on the Canadian market. Companies valued the transaction at $949 million based on Curaleaf’s closing stock price on Tuesday. However, the Massachusetts company’s shares hiked up by 12% on Wednesday just by word of the transaction, inflating the value of the deal at nearly $1.1 billion on paper.
The enormous size of the transaction underscores the potential investors in the market for legalized cannabis industry which has been evolving rapidly with a huge commercial landscape within the cannabis sector.
Especially after the farm bill which passed in December 2018, removing hemp derived cannabidiol from its list of Controlled Substance Act, cannabis has been gaining popularity among consumers. Companies are looking out for ways to create new, breakthrough products which could cater to the consumer market efficiently and effectively.
CBD gained popularity owing to its potential heath benefits which are known to be effective in treating pain, swelling, inflammation, decrease stress, depression, anxiety and also some severe ailments such as Cancer and epilepsy.
Though there are no recognized research or study that backs up these claims, CBD is known to be super beneficial as per the record of patients who used the drug to cure their ailments.
Joseph Lusardi, Curaleaf’s chief executive, said in a written statement“The transformational acquisition of Cura and the Select brand is another step in our journey to create the most accessible cannabis brands in the U.S.”
Cura says that it had a revenue of $117 million last year, almost triple the amount it had in 2017. The 500-employee company is technically larger than Curaleaf, which reported at $87.8 million in revenue last year. The newly combined company will be operating soon in 15 states where cannabinoid is legal.
Cameron Forni, earlier the Portland company’s chief executive will become Curaleaf’s President. He stated that the leading companies in the cannabis industry from the West Coast and the East Coast are joining forces to propel the legalization of cannabis throughout the country and render their power in getting mainstream acceptance of cannabis across the consumer market.
Cura has been in the limelight since the news of its former Chief Executive, Nitin Khanna was allegedly charged for rape allegations in 2014. Controversies had been encircling Cura since then, it has been suing a California rival for highlighting the accusations made on the former Chief Executive.
It sells wholesale cannabis oil used in vaping cartridges to retailers under the brand name of Select oils. Vaping has gained immense popularity in recent times and Cura has become the supplier for many popular cannabis brands. It sells cannabis oils under its own Select name for vaping. It also sells Select brand cannabidiol, CBD, which does not contain any THC, the chemical which is known to produce psychoactive effects after smoking pot.
You can pick up Select CBD on the health aisle at New Seasons in Portland which comes in different flavours including lemon-ginger, peppermint and lavender for up to $60. Or you can even buy a Select rub derived from hemp plant, cannabidiols for pets in chicken, salmon and bacon flavours.
Other marijuana businesses use Cura’a oils in their in-house products including the line of CBD by the talk show host Montel William.Cura claims to be the largest cannabis oil company in California and Oregon. Curaleaf said it would acquire Cura in exchange for 95.6 million shares, giving away Cura’s investors a 16% stake in the Massachusetts company.