Betting on the growing legalization of cannabis throughout the U.S., special purpose acquisition company (SPAC) Greenrose Acquisition Corp. (NASDAQ:GNRS) said it is buying four private companies to build a cannabis cultivation, distribution, and retail network across seven American states.
Consolidation and deals in the U.S. cannabis industry have surged in recent months on expectations that President Joe Biden’s administration will relax federal prohibition on cannabis and allow companies to operate similar to alcohol and tobacco.
Greenrose has announced that it plans to buy Shango Holdings, Futureworks, Theraplant and True Harvest in a deal valued at $210 million U.S. The newly combined company will have nine dispensaries and over 300,000 square feet of cultivation space, Greenrose said in a news release.
Greenrose said it expects to temporarily move from the NASDAQ to over-the-counter trading because companies growing or selling cannabis in the U.S. cannot list on major stock exchanges.
The company also plans to list on Canada’s NEO exchange after the deal closes later this year. Greenrose said it looked at deals with cannabis software companies, and eventually decided against it as valuations for such businesses were too high.
Greenrose stock has remain essentially unchanged at about $10 U.S. a share since May 2020.