Cresco Labs’ acquisition of Tryke to boost its stock

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The cannabis company acquires Tryke and its Reef Dispensary portfolio for $282.5 million

Tryke Companies, a seed-to-sale cannabis company that owns six dispensaries across several states, is going to become part of the Cresco Labs family. Cresco already has a number of operations in several states and it has agreed to purchase Tryke and all of its assets in a deal worth a total of $282.5 million. The announcement has already helped Cresco’s stock to jump, essentially helping to offset the cost of the acquisition.

Tryke has six Reef Dispensaries in Nevada and Arizona, as well as licensed cultivation and processing facilities in Nevada. It generated revenue of $70.4 million in its fiscal 2018 year, reportedly making it one of the most profitable private cannabis companies in the US. The acquisition gives Cresco about 8.11% of Nevada’s market share, a jump of 300% of the market share in Arizona and access to Utah following Tryke’s recent license approval in that state.

The co-founder and CEO of Cresco, Charlie Bachtell, explains of the deal, “We have been very clear with the market that we have entered the second chapter of the Cresco Labs story as we position the Company to lead in the middle two verticals of the value chain – brands and wholesale distribution. With significant in-state populations and tourist traffic, Nevada and Arizona were key near-term targets for expansion.”

The company, which is traded on the OTCMKTS, has seen its stock price increase slightly following the announcement. It began Tuesday morning at $7.20 before reaching $7.32 within two hours. Since then, it has remained steady at about $7.33.