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by Stockwatch Business Reporter

The Canadian Securities Exchange Composite Index jumped 20.69 points to 615.50 Wednesday. Curaleaf Holdings Inc. (CURA) surged $1.46 to $9.95 on 6.49 million shares after signing a definitive agreement to acquire GR Companies Inc. (known as Grassroots) for $875-million. Grassroots has 61 dispensary licences and 20 operating dispensaries today. Grassroots operates in states that Curaleaf is not yet in, including Illinois, which became the 11th state to legalize recreational cannabis in June, Pennsylvania, Arkansas, Michigan, North Dakota, Oklahoma and Vermont. The acquisition would expand Curaleaf's presence to 19 states, up from 12, and to 68 operating dispensaries, up from 48.

The $875-million purchase price is to be fulfilled through a $75-million cash payment, a 102.8-million-share issuance of Curaleaf and a final $40-million payment. The final payment will also be Curaleaf shares, priced at the 10-day volume weighted average price prior to the close of the deal (Curaleaf expects the deal to close in early 2020). As a result of the share issuances, Grassroots shareholders will own approximately 16 per cent of Curaleaf on a fully diluted basis (implying Curaleaf will have just under 950 million shares outstanding when fully diluted). As part of the agreement, Grassroots will appoint its co-founder and chief executive officer, Mitch Kahn, as a director of Curaleaf.

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