Months after a deal to sell itself fell through, Verano Holdings is back at the M&A table — this time as a buyer.
The Chicago-based marijuana company is buying AltMed, which operates in Florida and Arizona. Terms of the deal between the two privately held companies weren’t disclosed.
Verano, which operates in 12 states, will add two highly coveted markets. Florida is one of the largest and fastest-growing medical markets. Arizona just voted to allow recreational marijuana.
The combined companies will have about 1,600 employees, 44 retail stores and nearly 700,000 square feet of cultivation space. Verano doesn’t disclose revenue, but the company says the deal will make it one of the largest cannabis companies in the United States.
The deal reinforces Chicago’s status as a major center for the cannabis industry. It’s home to four of the largest companies, including Green Thumb Industries, Cresco Labs and PharmaCann, as well as Verano.
A year ago, Verano had planned to be acquired by Harvest Health & Recreation, a publicly traded company based in Phoenix, for $850 million. But that deal fell apart as cannabis stocks cratered and the coronavirus pandemic began to take hold.
This time Verano is the acquirer. The new company will be run by CEO George Archos, along with co-founder Sammy Dorf. AltMed’s founders are expected to remain with the combined entity.
“They’re profitable, like us,” Archos said. “It’s a combination of two very good companies. The deal made all the sense in the world. We began talking earlier this year.”
Verano had operations from Nevada to New Jersey, which also voted this election to approve recreational marijuana. Illinois is its largest market, with four stores and a cultivation facility. The company just opened a store in Naperville and will add stores in Naperville and downstate Charleston. It employs about 50 at its headquarters in River North.
Capital was scarce for cannabis companies last year, creating challenges for operators scrambling to add stores in expanding markets such as Illinois. But the money crunch has begun to ease. Archos said Verano was able to raise debt earlier this year, although he declined to say how much. The company remains on the hunt for acquisitions. “We’re looking at some other potential targets as well,” he said.