(Reuters) – Cannabis company Cresco Labs and Columbia Care Inc said on Monday they have mutually terminated the $2 billion merger announced in March last year.
“In light of the evolving landscape in the cannabis industry, we believe the decision to terminate the planned transaction is in the long-term interest of Cresco Labs and our shareholders,” said Cresco CEO Charles Bachtell in a statement.
Cresco executives had said in March the combined entity has the potential to be a brand as big as Coca-Cola or Johnnie Walker, as the deal would help it dominate a market likely to reach $46 billion in sales by 2026.
Plagued by a lack of access to capital – marijuana remains illegal at the federal level in the U.S. – and a thriving illicit market, cannabis firms have seen billions wiped off their market-caps since the highs in 2018. Canopy Growth had raised doubts in June about its ability to continue as a going concern.
Additionally, the companies last month said they will not be able to complete the divestitures necessary to secure all necessary regulatory approvals to close the transaction.
There are no penalties or fees related to the mutual agreement to terminate the transaction, the companies said.
(Reporting by Arshreet Singh in Bengaluru; Editing by Krishna Chandra Eluri)
