Columbia Care to Expand in Colorado with $42 Million Medicine Man Acquisition

According to a press release, Columbia Care Inc., one of the largest and most experienced cultivators, manufacturers and providers of cannabis products in the United States, announced that it has entered into a definitive agreement to acquire Medicine Man Denver, a premier vertically integrated cannabis company that has been serving the Denver metro area since 2009.

The acquisition of Medicine Man further solidifies Columbia Care’s position as the most scaled retailer, cultivator, and manufacturer in Colorado, the world’s second-largest cannabis market. Medicine Man is outperforming the broader Colorado market, with sales growth of 42 percent in 2020, versus 24 percent for the state, and 64 percent year-to-date through May, versus 25 percent for the state. The acquisition will add one cultivation facility and four dispensaries, including one co-located adult-use and medical location and three adult-use facilities to Columbia Care’s national footprint.

“We have great admiration for what Medicine Man’s leaders, Sally Vander Veer and Andy Williams, have built over the past 12 years through their tireless leadership, local and state-level advocacy, and exceptional business acumen and vision,” said Nicholas Vita, CEO of Columbia Care.

Medicine Man brings a highly experienced and talented team of executives and employees that further bolsters Columbia Care’s strong pool of talent. The company’s founders and management team are pioneers of Colorado’s legal cannabis industry, and over the past 12 years have built a widely regarded, highly profitable business that has earned strong loyalty amongst both its customers and employees. Because of this, Medicine Man has been recognized as a best-in-class retailer, employer and cultivator through numerous awards.

“Medicine Man is thrilled to announce our partnership with Columbia Care,” said Sally Vander Veer, CEO of Medicine Man. “They are an ideal partner, and I am confident in their ability to uphold the higher standards that our family-owned and operated cultivation and dispensaries have built over the past twelve years. I knew this opportunity was the right fit for our family and employees because of our shared commitment to operational excellence, emphasis on employees and culture, and a customer-first mentality. I look forward to a seamless integration and an exciting next chapter of growth and success.”

The upfront consideration of $42.0 million, comprising $8.4 million in cash and $33.6 million in stock, represents a multiple of approximately 4.5x projected 2021 EBITDA. The transaction terms also include a potential additional milestone payment in 2022 if certain performance targets are met.