RE:Halted CHICAGO & OTTAWA, Ontario--(BUSINESS WIRE)-- Cresco Labs Inc. ("Cresco Labs" or the "Company" "“ CSE: CL, OTCQX: CRLBF) and CannaRoyalty Corp. d/b/a Origin House ("Origin House" "“ CSE: OH, OTCQX: ORHOF) are pleased to announce today that they have entered into a definitive agreement (the "Agreement") pursuant to which Cresco Labs will acquire all of the issued and outstanding shares of Origin House (the "Origin House Shares") (the "Transaction"). Under the terms of the Agreement, holders of common shares of Origin House will receive 0.8428 subordinate voting shares of Cresco Labs (the "Cresco Labs Shares") for each Origin House Share (the "Exchange Ratio").
The Transaction represents a total consideration of approximately C$1.1 billion on a fully-diluted basis, or C$12.68 per Origin House Share (based on the Exchange Ratio and the closing price of Cresco Labs Shares on March 29, 2019, the last trading day prior to the announcement of the Transaction). The Transaction represents the largest public company acquisition in the history of the U.S. cannabis industry. The combined entity will be: one of the largest vertically-integrated multi-state cannabis operators in the United States; a leading North American cannabis company, by footprint; and one of the largest cannabis brand distributors.
Origin House has become a leading distributor and provider of brand support services in California, the world's largest regulated cannabis market. Origin House's proven strategy has been to build relationships with established dispensaries, build partnerships with established market-leading brands, develop promising cannabis product companies, and then leverage its full suite of support services to transform those products into strong California consumer brands. Origin House delivers over 50+ cannabis brands to more than 500 dispensaries in California, representing approximately 60% market penetration