Columbia Care, a publicly traded cannabis company, has acquired a 34-acre cultivation site in Riverhead for $42.5 million.
Columbia Care, which participates in the state’s medical marijuana program and also operates a retail dispensary in Riverhead, bought the site on Sound Avenue from Van de Wetering Greenhouses.
The deal includes a multi-year lease to operate about 740,000 square feet of greenhouse space, which the company plans to acquire with “200,000 square feet of incremental grow capacity,” according to a written statement.
Columbia Care plans to harvest its first crop of marijuana at the Riverhead facility before the end of the year, pending regulatory approval.
The Riverhead location offers supplemental cultivation and manufacturing capacity for Columbia Care’s existing Rochester facility that has served New York’s more than 120,000 medical cannabis patients since 2015, to meet the demand of a growing medical market. With the adoption of the state’s legalization of adult-use cannabis, the medical marijuana program was also expanded to offer whole marijuana flower later this year.
Columbia Care will pay a total purchase price of $42.5 million which includes $15 million in cash and $27.5 million in Columbia Care stock. The initial payment of $30 million has already been made. The remaining $12.5 million in stock payment will follow in August 2021 upon completion of the second phase of the transaction.
Van de Wetering was represented by attorney Lyle Maher of Farrell Fritz in Uniondale and Columbia Care was represented by attorney Erica Rice of Manhattan-based Foley Hoag in the deal.
“As a company whose roots are in New York, it has been incredibly important that we build a scalable, vertically-integrated operation in the state that not only delivers the very best quality and prices to our patients and partners today, but also ensures that we can continue to deliver on our mission to New Yorkers through future legal cannabis programs,” Nicholas Vita, CEO of Columbia Care, said in the statement. “This is a commitment to our patients, communities, regulators, elected officials and social equity partners that we are here for the long term and intend to be the leaders who define cannabis in New York State – made in New York, by New Yorkers for New Yorkers. We are eager to see New York’s regulated market emerge as one of the top global cannabis markets, with some market size estimates exceeding $5 billion by 2025 and more than 75,000 jobs created by 2027. We intend to continue to invest in opportunities that support this growth for all.”
Walter Gravagna, Van de Wetering Greenhouses owner and president, called the deal with Columbia Care “an incredible opportunity” for his company, employees, customers and the community.
“This transaction allows us to continue servicing our customers while transitioning production space over to cannabis as the market demand increases,” Gravagna said. “We are very excited to work with Columbia Care who is already our neighbor in Riverhead where one of its four medical cannabis dispensaries is located.”
The state’s legalization of adult-use cannabis is poised to increase Long Island’s economic output by $878 million annually, according to a recent report from the Long Island Association, which projects the legal cannabis industry will create more than 7,300 jobs in Nassau and Suffolk counties, supporting $317 million in employee compensation.