Cresco Labs Announces Mutual Agreement to Terminate Purchase Agreement With Tryke – Frees-Up $55 Million in Capital to Further Invest in Organic Growth Pipeline
CHICAGO, April 27, 2020–(BUSINESS WIRE)–Cresco Labs (CSE:CL) (OTCQX:CRLBF) (“Cresco” or “the Company”), one of the largest vertically integrated multistate cannabis operators in the United States, announced today that it has reached a mutual agreement to terminate the purchase agreement dated September 16, 2019, to acquire certain assets (the “Agreement”) from Tryke Companies, LLC (“Tryke”).
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.”
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.
Cresco Labs CEO and Co-founder Charlie Bachtell
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.
About Cresco Labs
Cresco Labs is one of the largest vertically-integrated multi-state cannabis operators in the United States. Cresco is built to become the most important company in the cannabis industry by combining the most strategic geographic footprint with one of the leading distribution platforms in North America. Employing a consumer-packaged goods (“CPG”) approach to cannabis, Cresco’s house of brands is designed to meet the needs of all consumer segments and includes some of the most recognized and trusted national brands including Cresco, Remedi and Mindy’s, a line of edibles created by James Beard Award-winning chef Mindy Segal. Sunnyside*, Cresco’s national dispensary brand, is a wellness-focused retailer designed to build trust, education and convenience for both existing and new cannabis consumers. Recognizing that the cannabis industry is poised to become one of the leading job creators in the country, Cresco has launched the industry’s first national comprehensive Social Equity and Educational Development (SEED) initiative designed to ensure that all members of society have the skills, knowledge and opportunity to work in and own businesses in the cannabis industry. Learn more about Cresco Labs at www.crescolabs.com.