Columbia Care Signs Definitive Agreement to Acquire Medicine Man, a Rapidly Growing, Vertically Integrated Operator in the Denver Metro Area
Pioneering Vertical Operator Will Significantly Strengthen Columbia Care’s Position as Leader in World’s Second-Largest Cannabis Market
- Immediately accretive to Columbia Care’s gross margin, Adjusted EBITDA, and free cash flow
- Adds four retail locations and a 35,000-square-foot cultivation facility that produces approximately three million grams of dried flower annually, all of which is sold through Medicine Man stores
- Transaction is expected to close in 4Q 2021
NEW YORK, June 15, 2021–(BUSINESS WIRE)–Columbia Care Inc. (NEO: CCHW) (OTCQX: CCHWF) (FSE: 3LP) (“Columbia Care” or the “Company”), one of the largest and most experienced cultivators, manufacturers and providers of cannabis products in the United States, today announced that it has entered into a definitive agreement to acquire Medicine Man Denver (“Medicine Man”), a premier vertically integrated cannabis company that has been serving the Denver metro area since 2009.
The acquisition of Medicine Man further solidifies Columbia Care’s position as the most scaled retailer, cultivator, and manufacturer in Colorado, the world’s second-largest cannabis market. Medicine Man is outperforming the broader Colorado market, with sales growth of 42 percent in 2020, versus 24 percent for the state, and 64 percent year-to-date through May, versus 25 percent for the state. The acquisition will add one cultivation facility and four dispensaries, including one co-located adult-use and medical location and three adult-use facilities to Columbia Care’s national footprint.
“We have great admiration for what Medicine Man’s leaders, Sally Vander Veer and Andy Williams, have built over the past 12 years through their tireless leadership, local and state-level advocacy, and exceptional business acumen and vision,” said Nicholas Vita, CEO of Columbia Care.
Medicine Man will further cement our position as the leading vertically integrated operator in Colorado, in tandem with our ongoing integration of The Green Solution, and will have a positive impact on our financial performance for years to come.
Nicholas Vita, CEO of Columbia Care
We are also confident that the strong alignment of values between our two companies will help Columbia Care continue its growth in Colorado in a sustainable and responsible way. We are thrilled to bring one of Colorado’s longest-running and most highly respected cannabis companies into the Columbia Care family.
Medicine Man brings a highly experienced and talented team of executives and employees that further bolsters Columbia Care’s strong pool of talent. The company’s founders and management team are pioneers of Colorado’s legal cannabis industry, and over the past 12 years have built a widely regarded, highly profitable business that has earned strong loyalty amongst both its customers and employees. Because of this, Medicine Man has been recognized as a best-in-class retailer, employer and cultivator through numerous awards.
Since 2009, the Medicine Man family has helped to pioneer the cannabis industry in Colorado. We have done it responsibly and vigorously, for our customers, employees, and our family. Our industry is changing and growing now faster than ever. We recognize the need to partner with others in order to continue to compete within, and help to responsibly transform, the industry as it grows.
Andy Williams, Medicine Man’s President and Co-Founder
We are proud to be joining our businesses with Columbia Care, a true leader in this next phase of growth in the cannabis industry. Columbia Care is made up of people with family business values and has the horsepower to lead the cannabis industry into the future. We are truly excited to be part of this new team.
“Medicine Man is thrilled to announce our partnership with Columbia Care,” said Sally Vander Veer, CEO of Medicine Man. “They are an ideal partner, and I am confident in their ability to uphold the higher standards that our family-owned and operated cultivation and dispensaries have built over the past twelve years. I knew this opportunity was the right fit for our family and employees because of our shared commitment to operational excellence, emphasis on employees and culture, and a customer-first mentality. I look forward to a seamless integration and an exciting next chapter of growth and success.”
The upfront consideration of $42.0 million, comprising $8.4 million in cash and $33.6 million in stock, represents a multiple of approximately 4.5x projected 2021 EBITDA. The transaction terms also include a potential additional milestone payment in 2022 if certain performance targets are met.
Foley Hoag LLP is serving as legal counsel to Columbia Care. Right Side Advisory Services is acting as financial advisor to Medicine Man. Husch Blackwell LLP is acting as legal counsel to Medicine Man.
About Columbia Care
Columbia Care is one of the largest and most experienced cultivators, manufacturers and providers of cannabis products and related services, with licenses in 18 US jurisdictions and the EU. Columbia Care currently operates 122 facilities¹ including 92 dispensaries and 30 cultivation and manufacturing facilities. Columbia Care is one of the original providers of medical cannabis in the U.S. and continues to deliver industry-leading products and services. The company launched Cannabist, its new retail brand, creating a national dispensary network that leverages proprietary technology platforms. Through its dispensary network, the company offers products spanning flower, edibles, oils, and tablets, and manufactures popular brands including Seed & Strain, Triple Seven, Classix, Plant Sugar, Press, Amber and Platinum Label CBD. Columbia Care is known for setting the standard for compassion, professionalism, quality, care, and innovation in the rapidly expanding cannabis industry. For more information on Columbia Care, please visit www.col-care.com.
1 Pro forma facilities either open or under development; includes facilities where Columbia Care provides consultative services pursuant to the terms of a management services arrangement