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Cannabis multistate operator Vireo Growth last month agreed to acquire retailer and delivery platform Eaze, the onetime “Uber of weed,” in a $47 million all-stock deal.
While the comparatively low acquisition price surprised some investors, others saw it as a sign of increased merger and acquisition activity to come following President Donald Trump’s executive order reclassifying cannabis as a less dangerous drug – as well as a signal that investors have confidence in large, mature markets like California.
According to a Dec. 22 news release from Minneapolis-based Vireo, the acquisition gives the MSO an additional 65 retail locations, a delivery infrastructure that has completed more than 12 million orders, and retail presences in Florida and California, two of the largest U.S. cannabis markets.
Under terms of the deal, California-based Eaze – once valued at nearly $700 million – will become a wholly owned subsidiary of Vireo.
“The addition of Eaze provides immediate scale in two of the country’s largest cannabis markets and strengthens our position in Colorado,” Vireo CEO John Mazarakas said in a statement.
Purchase of onetime “Uber of weed” gives MSO Vireo footprints in mature marijuana markets
Eaze is the sixth-largest retailer in Florida, where it has 39 medical cannabis dispensaries under its Green Dragon branding and about 64,000 square feet of cultivation canopy with room to expand.
In California, Eaze has four co-located retail and delivery locations, including one on San Francisco’s famous Haight Street, and eight delivery-only locations.
With the acquisition, Vireo also expands its Colorado presence with the addition of 14 retail locations, giving it a total of 55 stores in the state. When the deal closes, Vireo will have a presence in 10 states, with 166 retail stores and about 800,000 square feet of cannabis cultivation and production facilities, according to a news release.
President Trump’s marijuana rescheduling precedes dealmaking
The acquisition comes just over a year after Eaze rebranded from Eaze Technologies as part of a foreclosure and subsequent restructuring triggered by debt woes.
Investor Seth Yakatan, who told SFGate he had equity in Eaze prior to the restructuring, said he was surprised by the low sale price while acknowledging the deal shows “some optimism” for California, where annual legal sales continue to shrink amid familiar pressures from high taxes and the illicit market.
The Vireo-Eaze deal is part of a broader wave of consolidation in the cannabis industry that’s come in the wake of President Trump’s Dec. 18 executive order.
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