Cresco Labs Inc CRLBF and Columbia Care Inc CCHWF announced the signing of definitive agreements to sell certain Assets in New York, Illinois and Massachusetts to a company owned and controlled by Sean “Diddy” Combs.

Cantor Fitzgerald’s Pablo Zuanic Analysis

“Cresco Labs has entered into a definitive agreement to sell assets in IL/MA/NY for $185 million to a company owned and controlled by Sean Combs ($110M in cash upfront, which we believe will be easily funded),” said Pablo Zuanic. “Due to the Cresco deal, we remain overweight Columbia Care and maintain our price target of $8.37 (based on our PT for Cresco, adjusting for the exchange ratio of 0.5579).”

According to Zuanic’s analysis, “this significantly increases the likelihood that Cresco’s deal to acquire Columbia Care (CC) (by the end of Q1 23) will be completed (as per the latest guidance from year-end prior) and without changes. What’s left for sale: just assets in Ohio (vertical operation), a small processing unit in Maryland and the paper license in Florida.”

The analyst also noticed thatalthough not required The company may also choose to sell some of its assets in Florida and Pennsylvania for efficiency reasons.

“Based on comps, we believe the FL license could be worth $50M (although comps may be out of date), OH >$30M and MD ~$5M. So, as we add more assets to be sold (FL/PA), we believe the Company could potentially meet the guidance of $300 million in gross proceeds from asset sales,” he added.

In short, “Cresco’s strong Illinois franchise remains intact, and New York manufacturing facilities (primarily in expansion mode) also remain in-house (CC greenhouse in LI; new CL facility in Hudson Valley).”

“We are buyers of Cresco with a price target of $15, which equates to $8.37 for CC,” the Cantor analyst noted.

In addition, Columbia Care will report its third quarter 22 results on November 14th Call after the close at 4:30pm ET. “We are forecasting 2% seq sales growth vs. mid-single-digit guidance,” reads Cantors’ updated estimate…