The medical marijuana market just got its biggest merger. Trulieve Cannabis Corp. (OTC: TCNNF), a vertically integrated “seed-to-sale” company, announced last week the acquisition of Harvest Health & Recreation Inc. for $2.1 billion. Harvest Health is a vertically integrated medical cannabis company and multi-state operator. The company also operates retail locations. 

Trulieve will acquire all Harvest Shares, with each Harvest Shareholder receiving 0.1170 of a Trulieve Share for each Harvest Share, implying a price per Harvest Share of $4.79, a 34% premium to the May 7, 2021 closing price. Harvest Health generated $231.6 million in revenue in 2020 and $15.34 in adjusted EBITDA.

The deal gives Trulieve a wider, national footprint. Trulieve was the first licensed medical cannabis company in Florida and has a large market presence in the Northeast and Southeast regions of the United States, while Harvest Health is more concentrated on the West Coast. The merger will create the largest U.S. cannabis operator on a combined retail and cultivation footprint basis, creating a network of 126 dispensaries across 11 states, with leading market shares in Arizona and Florida. Harvest and Trulieve will have a combined 2021 estimated consensus adjusted EBITDA of $461 million, according to the release. 

Canaccord Genuity Corp. acted as exclusive financial advisor and DLA Piper (Canada) LLP and Fox Rothschild LLP acted as Canadian and United States legal counsel, respectively, to Trulieve. Moelis & Company LLC acted as financial advisor and Bennett Jones LLP and Troutman Pepper LLP acted as Canadian and United States legal counsel, respectively, to Harvest.

Trulieve is relatively new to the healthcare M&A market, announcing only two deals prior to this one, both in September 2020. The company bought Keystone Relief Centers LLC (dba Solevo Wellness), which owns and operates three medical marijuana dispensaries in the Pittsburgh metropolitan area, for $20 million, and PurePenn LLC, which produces pharmaceutical-grade medical marijuana products, including concentrates, flower, oil, capsules and tinctures, for $45 million. 

Harvest Health also announced a deal in 2020; in August, the company acquired Franklin Labs LLC, which operates a medical marijuana cultivation and processing facility in a 46,800-square-foot plant in Reading, Pennsylvania, for $25.5 million.