In a Canopy Growth ($WEED) level manoeuvre, Cronos ($CRON) has purchased an option to acquire a beneficial percentage of a private US MSO in Pharmacann.

Pharmacann claims to operate 23 dispensaries and 6 cultivation sites across 6 states – with 2 additional storefronts slated to open soon. They’ve also got an absolute shit ton of jobs posted. Like Vireo ($VREO), these guys began in the medical side, but learned to say ‘responsible adult use’ the moment they needed to.

All in, the deal notionally is paying ~=$24MM/dispensary, and cultivation at about $750/ft². Pretty much with what’s being paid for assets in ‘demand’ states like PENN and ILL.

I’ve been wondering when $CRON was gonna do something with their bank account, and for $100MM, they’re buying an opportunity to join 30 other brands on the shelves of Pharmacann stores, and notionally values Pharmacann at $1.1B. Extrapolating sales figures, my trusty napkin says $140MM-$160MM/year in revenue, and I’ve got zero visibility into anything else.

I see this thing is a play by Gotham Green indirectly – as principals Jason Adler and Mike Gorenstein are playing Monopoly. It’s an Acreage redux (which was repriced last fall after only 18 months), and in some corners being touted as ‘Mega Corp Consolidation‘. I don’t know about that. It feels more like a straight up equity play by a private equity firm. Hardly the stuff of dreams.

These are smart folks though, and I can’t help but muse it’s a retail play first and foremost. Sure as heck – with 3-Tier and DCC and Schumer sitting on his hands….a meteor strike can come out of the blue. They don’t present as much verticality as others, and blue-skying this….I wonder if $CRON isn’t picking a US lane here first and foremost.

Anyway – yawn. This isn’t much more than a deployment of un-deployed capital from a company that hasn’t done diddly for 7 quarters. And counting.

All I see it as is a private equity play.

The preceding is the opinion of the author, and is in no way intended to be a recommendation to buy or sell any security or derivative. The author holds no position in $CRON