Columbia Care’s Acquisition by Cresco Labs Creates Huge Cannabis Conglomerate and Huge Payout for This CEO
Friday, Columbia Care Inc. CCHW CCHWF (FSE:3LP) announced the approval of the previously announced plan of arrangement pursuant to which Chicago-based Cresco Labs Inc. CL CRLBF will acquire all of the issued and outstanding shares of Columbia Care.
The deal has been described as “transformational” as it will create one of largest multi-state marijuana operators in the United States, combining wholesale, retail and operations in the nation’s largest and fastest growing cannabis markets.
The combined footprint of the two companies will include more than 130 cannabis outlets in 17 states and DC, reaching up to 55% of the U.S. population, the companies said in a March press release at the time of announcement.
Charlie Bachtell, CEO of Crescokeynote speaker at September’s Benzinga Cannabis Capital conference in Chicago, is expected to become the combined company’s managing director.
Transformational for the CEO of Columbia Care too?
Nicholas Vita is expected to emerge with over $100 million in cash and stock. Details of Vita’s salary package were released in a regulatory filing ahead of Friday’s special meeting of shareholders. Vita has long been one of the highest paid CEOs in the marijuana industry.
Fred Whittlesey, a compensation expert and founder of Seattle-based Compensation Venture Group, called parts of the CEO’s compensation “atypical,” MJBiz Daily reported. “What is atypical is that a founder-CEO who is such a large shareholder would have arrangements for a change of control…when he gets close to $100 million (stock in the deal). “
Compensation package details
According to the regulatory filing, Vita’s shares and potential compensation include the following:
- Stock valued at $95.5 million at the time of the all-stock merger in March. The acquisition price of Cresco then represented a premium of 16%. The initial price was around $2 billion, although share prices have since fallen.
- A benefit in the event of a change of control valued at $12.2 million as of May 24, payable in monthly installments over three years.
- Accelerated vesting of restricted and performance stock awards. The filing says Vita had 15.6 million restricted stock units and 8.6 million performance stock units.
Fusionpending various regulatory approvals, is expected to close later this year.
Meet Charlie Bachtell, CEO of Cresco and a host of other executives, entrepreneurs, CEOs, investors, and more. cannabis in september Benzinga Conference on the Cannabis Capital, September 13 and 14 in Chicago. Get your tickets HERE and book your place at the Palmer House Hotel HERE
Benzinga photo via Shutterstock