The move follows Trulieve's recent $6 million purchase of Mountaineer Holding LLC, a West Virginia-based vertically integrated seed-to-sale and fully licensed medical marijuana company.
The Trulieve-Harvest Deal: Florida-based Trulieve agreed to acquire all of Harvest’s issued and outstanding subordinate voting shares, multiple voting shares as well as super-voting shares.
Under the terms of the agreement, Harvest shareholders will obtain 0.1170 of subordinate voting shares of Trulieve for each Harvest share priced at $4.79.
Once the deal is closed, Harvest shareholders will own roughly 26.7% of Trulieve's issued and outstanding pro forma shares (on a fully diluted basis).
Canaccord Genuity Corp. acted as financial counsel, while DLA Piper (Canada) LLP and Fox Rothschild LLP acted as Canadian and United States legal advisors for Trulieve.
Harvest's financial counsel for the deal was Moelis & Company LLC. Bennett Jones LLP and Troutman Pepper LLP acted as Canadian and United States legal advisors.
Why it Matters: The merger of the two cannabis giants will result in operations in 11 states, including a total cultivation and processing capacity of 3.1 million square feet spread across 22 facilities, as well as 126 retail locations selling both medical and recreational cannabis.
The combined company is poised to become one of the most profitable multi-state cannabis operations reaching an estimated total addressable market of $19.3 billion in 2025, with leading market shares in Arizona and Florida.
What's Next: Trulieve agreed to focus on the northeast and southeast regions of the country, while Harvest will pursue opportunities on the west coast and northeast regions of the U.S.
The merged company is expected to generate revenue of $1.2 billion in 2021.
"Harvest provides us with an immediate and significant presence in new and established markets and accelerates our entry into the adult-use space in Arizona," Trulieve CEO Kim Rivers said Monday.
TCNNF Price Action: Trulieve shares were trading 3.03% lower at $39.68 at last check Monday.
Harvest's Q1 2021 Financial Highlights
Separately, Phoenix-based Harvest reported generating $88.8 million in revenue in the first three months of 2021, representing year-over-year and sequential growth of 101% and 27%, respectively.
The first-quarter loss, before non-controlling interest, amounted to $23 million, compared to $7.4 million in the corresponding quarter of 2020.
Adjusted EBITDA came in positive at $26.9 million versus a $9.1 million gain in the corresponding period of last year.
Harvest pushed up its full-year 2021 revenue target to $400 million.