Cresco Labs Inc. acquires Origin House

Cresco Labs Inc. (“Cresco”) completed its acquisition of CannaRoyalty Corp. d/b/a Origin House (“Origin House”) by way of a plan of arrangement under the Business Corporations Act (Ontario) (the “arrangement”), creating one of the largest vertically integrated multistate cannabis operators in the U.S.

Pursuant to the terms of the arrangement, holders of common shares of Origin House (“Origin House common shares”) received 0.7031 (the “exchange ratio”) subordinate voting shares of Cresco (“Cresco shares”) for each Origin House common share held, while holders of class A compressed shares of Origin House (“Origin House compressed shares”) ultimately received 70.31 Cresco shares for each Origin House compressed share held.

The acquisition constitutes one of the largest U.S. cannabis mergers and is one of the first to pass through a second request under U.S. competition and antitrust laws.The acquisition of Origin House makes Cresco a leading wholesale distributor in California, selling into over 575 dispensaries, representing approximately 65 per cent of California’s storefront dispensaries. Origin House’s Continuum distribution platform distributes 13 third party brands, including Kings Garden.

Bennett Jones LLP acted as Canadian counsel to Cresco, with a team led by Aaron Sonshine and Kristopher Hanc and including Alan Gardner, Joseph Blinick, Jeffrey Kerbel, Christopher Travascio, Elad Travis, Bronwynn Shaw and Matthew Peters.

Norton Rose Fulbright Canada LLP acted as Canadian counsel to Origin House with a team that consisted of members from its securities, tax, U.S. corporate/securities, litigation and competition groups.