Yesterday morning, it was announced that Cresco Labs (CSE: CL) is entering Florida with its acquisition of Bluma Wellness (CSE: BWEL.u) in an all-share transaction. The transaction will see shareholders receive 0.0859 Cresco Labs share for every Bluma share held at the time of closing. The transaction valued Bluma at U$213 million. Bluma’s shares jumped as high as +30% on the day but ended up 13.5% at $1.01.
Cresco Labs currently has 14 analysts covering the company with a weighted 12-month price target of C$18.20. This is up from the average before the results, which was C$16.49. Three analysts have strong buys, 11 analysts have buy ratings, and one analyst has a hold rating.
Stifel-GMP’s analyst Andrew Partheniou raised their 12-month price target on Cresco Labs from C$20 to C$21.50 off the back of this acquisition. He sees this acquisition as an overall positive, even though Cresco Labs offered a premium valuation for their entry. He justifies the raise by stating, “we note the attractiveness of the FL market matched with the strong base of BWEL’s business, CL’s expertise in large and rapid production expansions and its more favourable access to capital.”