Hemp and cannabis manufacturer and retailer Curaleaf Holdings Inc. will acquire Tryke Cos., a privately held vertically integrated, multi-state cannabis operator, in a cash and stock transaction valued at approximately $286 million. Tryke operates Reef Dispensaries and manufactures the Reef Dispensaries product brand.
Tryke has refined processes to craft an ever-evolving selection of products and brands at multiple price points. The company’s dispensaries have served more than 7.6 million customers, offering a wide variety of in-house and third-party flower, concentrates, vape cartridges, edibles, topicals and CBD products.
Founded in Arizona in 2014, Tryke helped pioneer Nevada’s legal cannabis market from its inception in 2015, and continues to lead the industry in Utah where it has worked since 2019 to help establish the state’s medical cannabis program.
Upon closing, Curaleaf will assume ownership of Tryke’s extensive portfolio of processing licenses and expects to significantly expand its cultivation capacity from 30,000 square feet to over 80,000 square feet over the next three years.
“On Behalf of the board of directors and management team, I look forward to welcoming Tryke to the Curaleaf family as we expand our offerings and operations and bolster our competitive position in three key growth markets,” said Curaleaf founder and Executive Chairman Boris Jordan. “We believe that Tryke represents a unique opportunity to join forces with another industry leading pioneer that shares Curaleaf’s commitment to legalization and expansion.”
Jordan explained that the acquisition is a strategically and financially compelling transaction that will expand Curaleaf’s U.S. presence by bringing additional premium products to its consumers and retailers in Nevada, Arizona and Utah, all while yielding meaningful benefits for all of Curaleaf’s stakeholders.
Tryke CEO Adam Ryan called the deal a tremendous opportunity for Tryke. As a combined entity, he said that Tryke will continue to deliver significant value for its consumers and retailers. “As a part of Curaleaf’s growing network of dispensaries, Tryke is excited to bring its full suite of multi-price point products to an expanded base of consumers across the country,” added Ryan. “We are excited to join forces with the industry leader at such a pivotal moment in the United States’ legalization efforts. We share Curaleaf’s optimism for the future and are excited to become investors alongside the company’s talented leadership team.”
Strategic and Financial Benefits
- Enhances Curaleaf’s operations in Arizona, Nevada and Utah: Tryke currently owns and operates six heavily trafficked dispensaries under the Reef brand, with two retail stores in Arizona and four in Nevada, including the Phoenix metropolitan area, Las Vegas strip and North Las Vegas. The company’s products are sold in over 50 additional locations across its footprint.
- Enriches Curaleaf’s product offerings: Tryke currently offers a wide variety of in-house and third-party flower, concentrates, vape cartridges, edibles, topicals and CBD products at a range of price points. Tryke’s product portfolio is highly complementary to Curaleaf’s, allowing the company to offer consumers and retailers in Arizona, Nevada and Utah an even broader selection of premium cannabis products.
- Improves Curaleaf’s margins and free cash flow generation: Tryke has a strong financial profile, with a history of delivering significant revenue growth and compelling EBITDA margins in excess of 35%. Tryke is expected to record nearly $110 million in full year 2021 revenue. Curaleaf expects the acquisition will be immediately accretive to the company’s EBITDA margins and free cash flow generation.
The closing of the transaction is expected to occur in the second half of 2022 subject to customary closing conditions, including the receipt of approval from the applicable state regulators, including the Nevada Cannabis Compliance Board.
Based in Wakefield, Mass., Curaleaf Holdings Inc. is a leading international provider of consumer products in cannabis with a mission to improve lives by providing clarity around cannabis and confidence around consumption.
As a high-growth cannabis company known for quality, expertise and reliability, the company and its brands, including Curaleaf and Select, provide industry-leading service, product selection and accessibility across the medical and adult-use markets. In the United States, Curaleaf currently operates in 23 states with 111 dispensaries, 25 cultivation sites, and employs over 5,200 team members.