Curaleaf, the largest cannabis company in the U.S., is on its way to become the largest of its kind in the world after announcing a $286 million deal to acquire European marijuana company Emmac Life Sciences.
The Massachusetts-based cultivator and retailer announced Tuesday that it has agreed to acquire Emmac for a combination of cash and stock. The deal, which is expected to close during the second quarter of this year, will expand Curaleaf’s footprint to eight countries, including Germany, Italy, Portugal, Spain, and the United Kingdom.
Going Abroad: Boris Jordan, billionaire chairman of cannabis company Curaleaf, says the European … [+]
Boris Jordan, the billionaire executive chairman of Curaleaf, said during the company’s earning’s call on Tuesday that the acquisition is a “transformational launching point” and will turn the company into a dominant force in the global cannabis industry.
“We believe Europe will evolve into a cannabis marketplace that will eventually rival the U.S.,” Jordan said during the earnings call.
News of the deal was first reported by Bloomberg.
Jordan, who owns a $2.5 billion stake in the company, said Europe is part of the company’s long-term growth strategy. Jordan explained during Curaleaf’s earnings call that Europe’s population of 743 million is more than twice of the U.S. and the continent will eventually provide a total addressable market of $120 billion.
“[This is] the first step towards engaging world markets,” said Jordan.
Curaleaf plans to expand its global footprint in step with the march of marijuana reform. European countries have followed a similar trajectory in medical cannabis legalization as seen in the U.S. Over the next few years, some E.U. countries are expected to legalize recreational cannabis. Switzerland and the Netherlands both plan to launch recreational pilot programs this year. Luxemburg is discussing legalization by 2023.
Jordan described the Emmac acquisition as “a foothold for future expansion” in Eastern Europe, including existing medical markets in Poland and Croatia as well as potential new markets in countries like Ukraine.
To meet growing demand, Emmac’s cultivation facility in Portugal, which happens to be one of the oldest licensed cannabis growing facilities in Europe, plans increase its annual cultivation capacity to 10 tons by 2022.
Europe won’t be Curaleaf’s last stop. Eventually, Jordan hopes to expand to the Middle East and Africa.
“It also paves the way for entry into South Africa and Morocco, which are both exploring proposals to introduce legalization,” he said.
Curaleaf also reported its fourth quarter and full-year earnings on Tuesday. The company’s total revenue for 2020 was a record $626.6 million, a 183% increase over 2019. Curaleaf reported $144 million in adjusted EBITDA, four times 2019 levels. However, the company reported a net loss for 2020—$61.7 million, compared to a net loss of $67.2 million in 2019.
Jordan, who assumed control of Curaleaf in 2013 through his private equity company and took it public on the Canadian Stock Exchange in 2018, told Forbes in November that he’s positioning Curaleaf as a consumer-packaged goods company.
“We’re making the products much more mainstream for our customer base—we’ll be no different than Coca-Cola or Frito-Lay,” Jordan told Forbes.
To reinforce his packaged goods strategy, Jordan has also brought in new leadership this year. In January 2021, Curaleaf’s longtime CEO, Joe Lusardi stepped down to make room for Joe Bayern, who had been president of Curaleaf and previously worked for Dr. Pepper Snapple, and Cadbury.
“We are embarking on the next phase of achieving our ambition to become the global leader in cannabis,” Bayern said during Tuesday’s call.
Curaleaf became America’s largest cannabis company thanks to Jordan’s aggressive rollup strategy, one he said he refined in Europe by consolidating the data center industry with Telecity. In September 2019, Curaleaf had 49 dispensaries, but it now has 101. In 2019, Curaleaf announced two of its largest acquisitions that transformed the company—Cura Partners (owner of the Select brand), a vape and THC concentrates company, which Curaleaf bought in an all stock deal valued at $365 million, and Grassroots, one of the largest private cultivators and retailers with 30 dispensaries across Illinois, Nevada, Michigan, Oklahoma, Ohio, North Dakota, which Curaleaf bought for $830 million.
Jordan is now deploying that strategy again in Europe.
“2021 will be transformative,” he said. “The future of cannabis will be won by those who are investing aggressive in growth and scale.”
I am a staff writer on the vices beat, covering cannabis, gambling and more. I believe in the many virtues of vices. Previously at Forbes, I covered the world’s richest