Curaleaf Enters Europe Cannabis Market in $285 Million Deal


Curaleaf Holdings Inc. agreed to buy Emmac Life Sciences Ltd. for about $285 million, giving the company entry into Europe’s rapidly growing cannabis market.

“By doing this transaction, Curaleaf is indisputably the largest operator on a revenue and a footprint basis around the globe,” Executive Chairman Boris Jordan said in an interview Tuesday. With a market capitalization about $11 billion, Curaleaf is already the largest U.S.-based multistate operator.

The acquisition of Europe’s largest cannabis company by footprint is poised to turn Curaleaf into a dominant player internationally, giving it a new presence in eight countries. The tie-up will also allow Curaleaf to capitalize on a potential shift of Europe’s medical market toward a more consumer-oriented, recreational one, Jordan said, given that Emmac has a deal to sell CBD through Walgreens Boots in the EU.

“It’s a game-changing combination,” Antonio Costanzo, chief executive officer of Emmac, said in the phone call. It brings together the most successful consumer-oriented company in the U.S. cannabis industry, he said, with “the leading European medical cannabis company.”

The deal, expected to close early in the second quarter, will be funded through a combination of Curaleaf shares and cash, according to a statement released late Tuesday that confirmed an earlier Bloomberg report. The total value could change slightly based on fluctuations in the share price, Jordan said.

Both executives said they don’t expect it to face any regulatory hurdles.

Curaleaf’s shares extended a rally on the news, closing Tuesday up 16%, the biggest gain in almost a year. That roughly doubled its 2021 increase.

Rising Competition

The agreement comes as competition heats up in both the U.S. and the international markets.

The largest cannabis companies are racing to grow through acquisitions ahead of what many companies anticipate will be further legalization in the U.S. and increasing acceptance globally.

Europe currently only allows medical cannabis, but the deal positions the two companies to take advantage of what’s anticipated to be a fast-growing market as more countries consider recreational use. The Netherlands and Switzerland are expected to implement recreational programs by the end of the year.

U.S. companies have mostly been focused on North America, but may eventually want to compete with Canadian peers overseas. Canadian company Tilray Inc. has recently been touting its plans for growth in Europe as part of its merger with U.S. company Aphria Inc.; Intercure Ltd., an Israeli cannabis producer, recently agreed to be acquired by a U.S. firm to list on the Nasdaq.

Curaleaf can immediately start selling its CBD products in Europe, and plans to bring THC products, and its Select brand, to European markets through the deal, Jordan said. Unlike in the U.S., where the company can’t move federally illegal cannabis across state lines, Curaleaf’s product can be shipped anywhere in Europe through Emmac.

Making the deal a success may have its challenges -- most of them in the legalization realm. Bill Kirk of MKM Partners said in a research note Tuesday that international deals in cannabis so far have yielded weak returns.

“Entering new countries is difficult,” Kirk said. “However, as Europe progresses legislatively, today’s announcement could be the springboard to Curaleaf becoming a dominant global cannabis player.”

More Acquisitions

Jordan said he expects to make additional acquisitions in Europe, and getting into that market is a way to eventually expand into the Middle East and Africa.

“We’ll be very acquisitive, similar to what we did in the U.S.,” he said of his EU strategy. “Countries like Poland, Ukraine, South Africa -- there are even rumors of Egypt -- are also moving toward legalization and Europe is a great hub to attack those markets from.”

“Our whole idea is to spread the Select brand around the word. We want to be the No. 1 brand,” Jordan said.

Separately, Curaleaf on Tuesday reported a 186% jump in managed revenue in the fourth quarter, along with a net loss of $35.3 million, steeper than a year ago. Over the full year, the company completed eight acquisitions.

Curaleaf had recently raised $300 million via a senior secured term loan.

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