Trulieve Cannabis Corp said on Monday it will buy medical pot producer Harvest Health & Recreation Inc for $2.1 billion, creating the largest U.S. cannabis company by revenue.
The prospect of U.S. reforms gives companies a chance to further capitalize on consumer appetite for pot products, which has risen since the onset of the COVID-19 pandemic, leading to a jump in cannabis dealmaking in recent months.
The deal gives Trulieve a foothold in Florida, Pennsylvania and Maryland, and in core markets including Arizona, where the recreational adult use of cannabis was recently legalized.
Harvest Health’s shares rose 15% in afternoon trading to C$5, while Trulieve fell over 4% to C$47.62 on the all-stock deal.
“I think this is the beginning of a trend we are likely to see in the industry,” said Robert Leidy, founder at investment manager Teneo Capital Management.