Driven By Stem (CSE: STEM) this morning announced that it will be expanding into the state of Colorado. The expansion comes via the firms latest transaction, which has seen the company enter a letter of intent to acquire Colorado Harvest Company.
A vertically-integrated operator, Colorado Harvest is one of the oldest such operators in the city of Denver. The company currently holds two delivery permits, three dispensaries, and two cultivation facilities. Notably, the firm was the first in the state to be granted a delivery license.
Operationally, the firm is expected to see over $13.0 million in revenues for 2021, with gross margins of $5.1 million, adding significant topline revenue to Stem in the process.
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“The acquisition of CHC is the first step in Colorado’s footprint for Stem. This transaction is inserted in a larger plan to provide best in class retail, as well as ecommerce service with Budee™ delivering quality products to customers located in all geographic areas of the State,” commented CEO Adam Berk, suggesting further acquisitions are coming as the firm looks to take a foothold in the second largest cannabis market in the country. Colorado saw growth of 25% in 2020, growing to US$2.2 billion.
Terms of the transaction were not provided, with the company instead commenting that it intends to negotiate terms of a definitive agreement with Colorado Harvest.
Driven By Stem last traded at $0.27 on the CSE.
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