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Cannabis Summary for Feb. 26, 2021

2021-02-26 20:11 ET - Market Summary

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by Stockwatch Business Reporter

The S&P/TSX Cannabis Index lost 1.53 to 257.60, while the CSE Composite Index added 2.60 to 938.50. South of the border, Verano Holdings Inc. (VRNO) lost $1.24 to $27.65 on 372,100 shares, after declaring itself "enormously excited" to expand in Illinois, Pennsylvania and Arizona. Its excitement matches the price tag. Verano is acquiring one dispensary in Arizona, one dispensary in Illinois (plus the right to open one more) and three dispensaries in Pennsylvania (plus the right to open three more), all for a grand total $98.6-million (U.S.) cash and roughly $166-million (Canadian) worth of shares.

Verano is already active in these three states, and clearly willing to pay the high price to expand in them, as it says they are all high-potential markets. Illinois, after legalizing recreational cannabis at the beginning of 2020 (medical was already legal), promptly saw its 2020 cannabis sales cross the $1-billion (U.S.) mark (two-thirds recreational and one-third medical). Verano's acquisition of one dispensary and the right to open one more will take it to the state maximum of 10 dispensaries. Given the location of Nos. 9 and 10, the deal is also "unlocking the coveted Chicago market" for Verano. It will pay $48.3-million in cash and shares under this deal.

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