It seems like high times for Chicago’s medical (and potentially budding recreational) marijuana industry, as companies based in the city continue to announce multimillion-dollar deals.
Chicago’s Cresco Labs on Monday unveiled a $120 million merger that allows it to expand into Florida, where analysts predict demand for medical marijuana will significantly grow in the coming years. By 2022, the market for medical pot could reach a whopping $1.7 billion, according to analysts’ projections.
Under the agreement, Cresco will acquire Florida marijuana grower and retailer VidaCann, a move that will allow Cresco to operate 30 medical dispensaries in the nation’s third most populous state. The company aims to significantly expand its operations by the end of the year, in part by doubling the size of its medical marijuana cultivation center. It also plans to have 20 dispensaries open by year’s end.
In a news release, Cresco CEO Charlie Bachtell said the VidaCann deal “is consistent with Cresco Labs strategy of entering markets with outsized demand” and “dramatically impacts” Cresco’s growth.
Cresco, one of the largest marijuana companies in Illinois, will have licenses to operate in 10 states if its deal with VidaCann is approved. Last year, it debuted on the Canadian Securities Exchange to tap into more capital.
Cresco’s move into Florida comes at a time when marijuana companies are fighting for dominance across the country and are seeking to expand their footprints in states where medical and recreational marijuana is legal.
Last week, a Phoenix company announced one of the largest pot deals in U.S. corporate history by taking over Chicago-based Verano Holdings for $850 million.
If Cresco’s ownership of VidaCann is approved, Cresco could surpass another major marijuana player based in Chicago — Green Thumb Industries, which currently has 11 cultivation centers. Cresco, meanwhile, could have 14 production facilities through its deal with VidaCann. Green Thumb also went public on the Canadian Securities Exchange last year.
The game of chess in the marijuana market, with larger companies grabbing up smaller ones in crucial states, comes as Illinois lawmakers are preparing legislation to legalize recreational cannabis, with both powerful House Speaker Michael Madigan and Gov. JB Pritzker saying they support the move.
A vote could come as early as July.
Hunter Clauss is a digital editor for WBEZ. Follow him @whuntah.