William Sumner
The Illinois-based Cresco Labs (CSE:CL) (OTCQX:CRLBF) is looking to shore up its balance sheet by selling off one of its properties. Today the company announced that it would sell its Lincoln, Illinois cultivation facility to GreenAcreage Real Estate Corp. (GreenAcreage), for $50 million.
“This Agreement is representative of the comprehensive approach to capital planning that we anticipate will ensure our future success, while enabling us to grow our footprint both rapidly and responsibly,” says Charlie Bachtell, Cresco Labs CEO and Co-founder. “We have several opportunities right in front of us, including in our home market of Illinois, which will be moving forward with adult-use legalization on January 1st and is projected to reach $2 billion to $4 billion in annual sales at maturity.”
Though Cresco is technically selling the property, which is still under construction, the company has entered into a triple-net lease agreement with GreenAcreage and will continue operating on the property as a licensed medical & recreational cannabis cultivation and processing facility. Once completed, the facility will be around 220,000 feet and help the company maintain its considerable share of the Illinois medical cannabis market.
“We are confident that today’s announcement, together with the measured steps we continue to take to strengthen our capital position and continue investing in strategic U.S. cannabis markets, will generate significant returns for our shareholders, our employees and the communities in which we operate,” added Bachtell.
Over the last quarter, the company has been making moves to strengthen its finances through a number of similar deals. Last month Cresco announced a sale-and-leaseback agreement for its Marshall, Michigan and Yellow Springs, Ohio facilities, which totals $38 million. Cresco was also forced to amend its $800 million merger with Origin House, due to a combination of market forces and falling stock prices. After making some changes to the merger, which included an Origin House equity financing worth around $30 million, the value of the deal fell to roughly $416 million.
