CRLBF CrescoThis one hit the radar on Friday amongst the carnage in pot stocks. It was one of the few pot stocks up Friday as the sector was getting hit again.
I’d recommend going to their investor relations page and listening to both their latest earnings call and August Investor presentation. These are ex-mortgage bankers that seem focused on their business plan. It looked to me like this stock popped after both the Investor presentation and the earnings but has given a bit of that back.
CRLBF is growing into new geographies so if they execute they could grow into their pricey valuation. They don’t appear to have any “debt” but appear to have a $50m obligation perhaps related to a $50m asset (biz purchase?). Pink Sheet stocks take awhile to decipher due lack of standard filings. I don’t own CRLBF yet, but I’m considering it, probably with a $.50 stop. Appreciate any insight from anyone that follows this one.
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Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) is acquiring CannaRoyalty Corp. also known as Origin House (CSE: OH) (OTCQX: ORHOF) in a deal valued at C$1.1 billion or C$12.68 ($9.60 U.S.) per Origin House Share (based on the Exchange Ratio and the closing price of Cresco Labs Shares on March 29). The deal looks to be the largest public company acquisition in the history of the U.S. cannabis industry.
Terms Of The Deal
Cresco Labs will acquire all of the issued and outstanding Origin House Shares, with each holder of Origin House common shares receiving 0.8428 Cresco Labs Shares for each Origin House Share (and each holder of an Origin House proportionate voting share receiving 84.28 Cresco Labs Shares for each proportionate voting share held), which implies a price per Origin House Share of C$12.68 – US$9.60 – (on an as-converted basis), which was set by the closing price per share of Cresco Lab on March 29, 2019, representing a total consideration of approximately C$1.1 billion (on a fully-diluted). Origin House shareholders will hold approximately 20% of the issued and outstanding Cresco Labs shares on a pro forma, fully-diluted and as converted basis, enabling Origin House shareholders the opportunity to participate in the expected value created through the deal. The company said there would be an immediate premium to Origin House shareholders of approximately 26% over the 30-day volume weighted average price.
CHICAGO & OTTAWA, Ontario–(BUSINESS WIRE)– Cresco Labs Inc. (“Cresco Labs”) (CSE: CL) (OTCQX: CRLBF) and CannaRoyalty Corp. d/b/a Origin House (“Origin House” and together with Cresco Labs, the “Companies” – CSE: OH, OTCQX: ORHOF), both announced today that, effective September 16, 2019, they have each submitted certifications of substantial compliance with the request for additional information (“Second Request”) from the United States Department of Justice Antitrust Division (the “DOJ”) in connection with Origin House’s and Cresco Labs’ notification to U.S. antitrust authorities pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”), as amended, in respect of Cresco Labs’ pending acquisition of Origin House (the “Transaction”).
The HSR Act waiting period was extended by the issuance of the Second Requests to Cresco Labs and Origin House. That extended waiting period terminates 30 days after substantial compliance, and the parties would be free to close unless the DOJ obtains an injunction against the transaction. That waiting period is expected to expire on or around October 17, 2019. The expiration of the waiting period under the HSR Act is the last significant condition to completing the Transaction, and the parties are expecting to be in a position to close the Transaction following the expiration of the waiting period. The issue was finally approved, and the upcoming merger was set for sometime between August 15, 2019 and September 15, 2019. The two companies then announced the merger would take place on September 15, 2019.
Origin House and Cresco Labs agreed to extend the outside date to complete the Transaction to November 15, 2019.