Harvest Health and Recreation has acquired Verano Holdings for an $850 million all-stock deal that will make the combined companies the largest publicly-traded cannabis operator in the U.S., according to a story by the Motley Fool.

Harvest Health and Recreation is a vertically-integrated, multi-state cannabis operator that did not receive much press before its acquisition of Verano Holdings. When the acquisition is completed — expected by mid-year — the two companies will control 30 dispensaries, eight cultivation facilities, and seven manufacturing facilities.

Expansions are expected to continue. The two companies control nearly 200 licenses together across 16 states. Even if they acquire no further licenses, their current capacity stands at 123 dispensaries, 70 of which are expected to be open by the end of this year.

Harvest Health is also one of the few profitable cannabis companies to have emerged from the industry’s early years. While speculation in the industry is largely based around future expected earnings, Harvest Health is already profitable and the acquisition of Verano Holdings is not expected to change that.

Now, the main danger Harvest Health faces is that it may have overpaid for Verano Holdings — whose price tag is largely a product of speculation — and that issuing $850 million in common stock will devalue Harvest Health enough to make it struggle in competition with other mega cannabis companies like MedMen.

MedMen’s acquisition of PharmaCann had been the largest U.S. cannabis company acquisition before the current deal between Harvest Health and Verano was announced.

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