Columbia Care Brings Scale to New York Cannabis Program Through Acquisition of One of the Largest Operating Greenhouse Sites on East Coast

Rhea-AI Summary

Columbia Care has acquired a 34-acre cultivation site in eastern Long Island, NY, enhancing its capacity for the state's medical marijuana program, with anticipated first sales in Q4 2021, pending approvals. This site provides 740,000 square feet of greenhouse space and an additional 200,000 square feet for cultivation. The acquisition, costing $42.5 million, is aimed at meeting growing market demand and supports the company's entry into New York's adult-use market. Columbia Care aims to lead in New York’s cannabis sector, with market projections exceeding $5 billion by 2025.

Positive

• Acquisition of a 34-acre cultivation site enhances operational capacity.
• 740,000 square feet of greenhouse space, with an additional 200,000 square feet for cultivation.
• Anticipated first sales in Q4 2021 align with market demand.
• Strategic expansion supports entry into adult-use cannabis market.
• Projected New York cannabis market growth to over $5 billion by 2025.

Negative

• The acquisition is contingent on regulatory approvals, which may delay operations.
• Initial payment of $30 million made, further $12.5 million stock payment pending completion.

Columbia Care Inc. (NEO: CCHW) (CSE: CCHW) (OTCQX: CCHWF) (FSE: 3LP) (“Columbia Care” or the “Company”) announced today it has acquired a 34-acre cultivation site in eastern Long Island, New York. The Company’s first harvest and sales from this property for the state’s medical marijuana program is expected in Q4 2021, pending regulatory approvals.

The Long Island location offers supplemental cultivation and manufacturing capacity for Columbia Care’s existing Rochester facility that has served New York’s more than 120,000 medical cannabis patients since 2015, to meet the demand of a growing medical market, which, subject to regulatory approval, will include a number of newly approved additional form factors, including flower, in 2021. The new site also allows the Company to diversify its operations and open opportunities to create potential social equity business partnerships; a dedicated, federally-licensed global medical cannabis manufacturing and research hub in Rochester; and support the company’s entrance into the state’s adult-use program.

This facility currently has approximately 740,000 square feet of operational greenhouse space, which the Company plans to acquire upon phase two of the transaction, with 200,000 square feet of incremental grow capacity, situated perfectly for both retail distribution to Columbia Care’s three NYC and Long Island dispensaries and wholesale distribution to the most densely populated metropolitan area in the United States. The property’s infrastructure is fully developed for industrial scale and throughput and is currently used for growing ornamental flowers. Additionally, the existing owners have previously planted and successfully harvested industrial hemp on-site.

“As a company whose roots are in New York, it has been incredibly important that we build a scalable, vertically-integrated operation in the state that not only delivers the very best quality and prices to our patients and partners today, but also ensures that we can continue to deliver on our mission to New Yorkers through future legal cannabis programs. This is a commitment to our patients, communities, regulators, elected officials and social equity partners that we are here for the long term and intend to be the leaders who define cannabis in New York State – made in New York, by New Yorkers for New Yorkers,” said Nicholas Vita, CEO of Columbia Care. “We are eager to see New York’s regulated market emerge as one of the top global cannabis markets, with some market size estimates exceeding $5B by 2025 and more than 75,000 jobs created by 2027. We intend to continue to invest in opportunities that support this growth for all.”

Columbia Care will pay a total purchase price of $42.5M, which includes $15.0M in cash and $27.5M in Columbia Care stock. The initial payment of $30.0M has been made. The remaining $12.5M in stock payment will follow in August 2021 upon completion of the second phase of the transaction.

About Columbia Care

Columbia Care is one of the largest and most experienced cultivators, manufacturers and providers of medical and adult use cannabis products and related services with licenses in 18 US jurisdictions and the EU. Columbia Care currently operates 115 facilities¹ including 87 dispensaries and 28 cultivation and manufacturing facilities. Columbia Care is one of the original providers of medical cannabis in the United States, and continues to deliver an industry-leading, patient-centered medicinal cannabis operation that has quickly expanded into the adult use market as a premier operator. The company currently offers products spanning flower, edibles, oils, and tablets, and manufactures popular brands including Seed & Strain, Amber and Platinum Label CBD. With more than four million sales transactions since its inception in 2012, Columbia Care is known for setting the standard for compassion, professionalism, quality, care, and innovation in the rapidly expanding cannabis industry. For more information on Columbia Care, please visit www.col-care.com.

Caution Concerning Forward-Looking Statements

This press release contains certain statements that constitute forward-looking information within the meaning of applicable securities laws and reflect the Company’s current expectations regarding future events. The Company has made assumptions with regard to its ability to execute on brand and product initiatives, which although considered reasonable by the Company, may prove to be incorrect and are subject to known and unknown risks and uncertainties that may cause actual results, performance or achievements of the Company to be materially different from those expressed or implied by any forward-looking information. Securityholders should review the risk factors discussed under “Risk Factors” in Columbia Care’s Annual Information Form dated March 31, 2021, filed with the applicable Canadian securities regulatory authorities on SEDAR at www.sedar.com and described from time to time in documents filed by the Company with Canadian securities regulatory authorities.

¹ Pro forma facilities either open or under development

View source version on businesswire.com: https://www.businesswire.com/news/home/20210428006171/en/

FAQ

What is the purpose of Columbia Care's acquisition of the Long Island site?

The acquisition aims to enhance cultivation capacity for New York's medical marijuana program and support entry into the adult-use cannabis market.

How much did Columbia Care pay for the Long Island cultivation site?

Columbia Care agreed to a total purchase price of $42.5 million, including $15 million in cash and $27.5 million in stock.

When will Columbia Care start selling products from the new site?

Columbia Care expects to begin sales from the new site in Q4 2021, pending regulatory approvals.

What are the expected benefits of the Long Island acquisition for Columbia Care?

The acquisition is expected to meet growing market demand, provide additional cultivation capacity, and facilitate entry into a lucrative adult-use market.

What is the projected size of New York's cannabis market?

Market estimates suggest New York's cannabis market could exceed $5 billion by 2025.