United States cannabis giant Curaleaf (CURLF) is expanding its cannabis empire internationally through a $286 million deal to acquire European cannabis company Emmac Life Sciences Limited.
The largest cannabis company in the U.S. announced the deal after the close of trading Tuesday and said the acquisition would be a split cash-and-stock deal, with 15% of
the payment being funded in cash and 85% being funded through Curaleaf subordinate voting shares.
Emmac Life Sciences is a leading vertically integrated European cannabis company operating in several European medical cannabis markets, including the United Kingdom, Germany, Italy, Spain and Portugal. Curaleaf Executive Chairman Boris Jordan said in a statement that the deal would give Curaleaf access to a market that has potential to expand beyond the U.S.
The consumer and political liberalization trends around cannabis that are sweeping the U.S. are also increasingly taking hold in Europe," he said. "Curaleaf will seek to leverage our branded cannabis consumer packaged goods strategy across Europe, a market which provides for cross-border cannabis distribution. The European cannabis market has the potential to exceed the U.S. cannabis market over the long-term and will help fuel our growth for years to come."
The deal is particularly interesting as it now places Curaleaf in more direct competition with Canadian giants Aphria and Tilray who recently teamed up and flaunted a strong European presence as a competitive edge. Tilray, for its part, has invested heavily into production in Portugal and in 2020 acquired its third so-called Good Manufacturing Practice, or GMP, certification in the country. Emmac, Curaleaf stressed in its release, boasts a Portugal cultivation facility that is "an industry leader in cannabis flower production cost."
Earlier this year, Jordan explained to Yahoo Finance why the company chose to raise a combined $300 million in debt and equity in January to invest in growth as reforms became more likely.
"We raised $300 million in order to cash up, in order to have the ability to invest across the country in all of those states and in new states that we think will be coming online and the fact that legalization will be moving much faster. So it was really there in order to prepare the company for what we think will be an acceleration of growth," he said
During the same interview he stressed that the formulated cannabis market, including drinks and edibles, looked more attractive in the long-term.
Zack Guzman is an anchor for Yahoo Finance Live as well as a senior writer covering entrepreneurship, cannabis, startups, and breaking news at Yahoo Finance. Follow him on Twitter @zGuz.
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