Cresco Labs sells two properties in leaseback agreement
Chicago-based cannabis product manufacturer and distributor Cresco Labs Inc. said Friday it is selling two of its Illinois properties to Innovative Industrial Properties, Inc. for approximately $46.3 million.
Cresco said it will also lease the properties in Joliet and Kankakee back from IIP and continue to operate its cannabis cultivation and processing businesses currently at the facilities.
"This sale-and-leaseback agreement with IIP represents a ... solution for Cresco Labs that will support the expansion of our Illinois operations in preparation for the legalization of adult-use cannabis on Jan. 1, 2020," said Cresco Labs CEO and Co-founder Charlie Bachtell.
Bachtell added a portion cash generated from the sale will be used to ramp up the company's cultivation capacity and retail dispensary network to meet the increase in demand projected from the legalization of recreational cannabis and the expansion of the medical-use program.
"With the Illinois cannabis market projected to reach $2 billion to $4 billion in annual sales at maturity, the expansion of our operations will position Cresco Labs to build upon our leading market share and significantly increase the revenue we generate from Illinois in the coming years," he added.
The company's presence in the industry has increased proportionately with states legalizing cannabis for medical and recreational use. It currently operates in 11 states with 23 production facilities and 22 owned dispensaries, including one in Buffalo Grove.
The sale is expected to close by the end of October.