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Chicago's Cresco Labs to buy Canadian pot firm Origin House for $1.1B

(via Shutterstock)

Canadian cannabis branding company Origin House has entered into an agreement to be acquired by U.S. company Cresco Labs Inc. for approximately $1.1 billion.

As part of the all-stock deal, Origin House common shareholders will receive 0.8428 subordinate voting shares of Cresco, a cannabis cultivator, processor and retailer headquartered in Chicago, for each share of the Ottawa-based pot firm.

The two companies say in a joint release that the deal amounts to approximately $1.1 billion on a fully-diluted basis, or $12.68 per Origin House share based on Cresco's closing price on March 29.

Origin House, previously known as CannaRoyalty, has a portfolio of more than 50 brands in its portfolio including Chong's Choice and Cheech's Favourite Stash by cannabis comic Tommy Chong.

Origin House's brands and 130 branded products are distributed to more than 500 dispensaries across California, where recreational cannabis is legal and a key market for U.S. operators.

The companies say the resulting combined entity will be one of the largest, vertically integrated multi-state operators south of the border.