Curaleaf acquires Emmac

The the world's largest cannabis company, Curaleaf has signed a $ 285 million deal to buy Emmac, one of Europe's leading cannabis producers, betting on the forthcoming liberalization of cannabis attitudes in Europe.

Massachusetts-based Curaleaf Holdings operates over 100 cannabis stores in 23 US states. The company will pay 285 million $ (€240 million) upfront and a further 57 million $ (€48 million) based on performance.

«By making this transaction, Curaleaf is unquestionably the largest operator in terms of sales and footprint in the world,» said declared Tuesday, Executive Chairman Boris Jordan. With a market capitalization of around 11 billion $, Curaleaf is already the largest US-based multi-state operator.

The acquisition of one of Europe's largest cannabis companies will make Curaleaf a dominant international player, giving it a new presence in 8 countries. The combination will also enable Curaleaf to capitalize on a potential shift in the European medical market towards a more consumer-focused, recreational market, notably through Emmac's distribution agreement with Boots, a UK-based network of beauty stores and pharmacies.

«This is a game-changing combination,» said Antonio Costanzo, CEO of Emmac, «It brings together the most successful consumer-focused company in the US cannabis industry with Europe's leading medical cannabis company.».

Curaleaf shares closed yesterday up 16%, its biggest rise in almost a year.

Distribution and acquisitions

Curaleaf can immediately start selling its CBD products in Europe and plans to market THC products and its Select brand in European markets through this agreement. Unlike in the US, where the company cannot transport illegal cannabis at federal level from state to state, Curaleaf's products can be shipped anywhere in Europe via Emmac.

Boris Jordan has stated that he plans to make further acquisitions in Europe, and entering this market is a means of eventually expanding into the Middle East and Africa.

«We will be very offensive, just like we have been in the United States,» he said of his European strategy. «Countries like Poland, Ukraine, South Africa - there are even rumors about Egypt - are also moving towards legalization, and Europe is an excellent hub to attack these markets.»

«Our idea is to spread the Select brand worldwide. We want to be the No. 1 brand,» said Jordan.

Curaleaf, listed at a premium in Canada, is the world's largest cannabis supplier by sales, with 653 million $ last year. The recent wave of recreational cannabis legalization in U.S. states has «radically» changed Curaleaf's business model, Jordan said. At the beginning of last year, the company was making about 90% of its money from medical cannabis. Now, about 60% comes from recreational use.

He will soon be eclipsed by Aphria and Tilray, once their merger is complete, with annual sales of around 700 million $.