COLUMBIA Care has confirmed to BusinessCann that it is set to ‘wind down’ its operations across the UK and Europe as its upcoming $2bn takeover by Cresco Labs nears its final stages.
The US cannabis giant, which currently has a market cap of around $700m, will pull its products from sale in the UK at the end of August, with products across Europe where it has had a licence to operate since 2018, will follow soon after.
Over the past few years Columbia Care has launched a number of initiatives across the UK, Germany and Malta, citing an upcoming ‘pipeline of innovative formulations we aim to bring to the UK and EU markets.’
With the recent momentum in the company’s international operations, the sharp turnaround in strategy from the first US cannabis operator to gain a licence to operate in the EU will come as a surprise to many investors, many of whom are anticipating a new wave of transatlantic investment in the wake of rapid European cannabis liberalisation.
Columbia Care in Europe
In 2018, the company announced the launch of a new ‘EU and global expansion strategy’ after receiving a ‘fully integrated licence’ in Malta, a ‘key strategic access point for Europe’ from which it planned to launch its EU expansion.
A year later, Columbia Care entered into a partnership with GMP certified German developer Moeller Pharma, a move it said would enable it to create ‘long-term, sustainable value’ through ‘diversification and global expansion’.
The same year, it launched its shares on the Frankfurt Stock Exchange, stating that this would ‘enable European investors and capital allocators to more easily participate in our success as we continue to expand Columbia Care’s global leadership in the cannabis industry.’
Later it created its Columbia Care International subsidiary, focused on serving the medical cannabis markets in ‘the UK and Germany and the UK hemp-derived wellness market’.
In 2021 it also made some significant advances into the UK market, becoming the first to launch a solid-fill medical cannabis capsule in the UK in April.
Months later, in December, it became the first company to manufacture medical cannabis extract vaporisers in the UK, launching four vapourisers to market via its brand Ceed, supplementing its existing product range.
Columbia Care also worked with a number of UK medical cannabis companies, including Grow Pharma, its ‘market access partner’, and IPS Pharma, who said in a statement to BusinessCann: “Grow IPS Pharma who manufacture and distribute the Columbia Care products have ensured us that patient care will not be impacted by the move.”
Alongside its products focused on the medical cannabis market, the company also operates its Columbia Care Platinum CBD wellbeing brand.
Winding Down of EU Operations
On August 1, Columbia Care announced on its Platinum CBD Instagram account that it is ‘closing down’, launching a site wide 75% sale.
“We have loved every minute of working in the UK but the difficult decision has been made to close our UK shop. We can only apologise that we will no longer be supplying our products here.”
It added that its shop will close on August 31, while its service desk will remain open until September 30.
Columbia Care has since confirmed to BusinessCann it will not only be pulling its CBD range from the UK, but winding down its operations across Europe entirely.
Head of International Operations Hari Guliani said: “Columbia Care has made the difficult decision to wind down operations in the UK and Europe and refocus efforts on the U.S.-based business.
“We recently began communicating this to our partners, doctors and patients. It was very important to us to minimise any disruption so we have worked diligently to make arrangements with our existing partners to avoid gaps in the formulary of medicinal cannabis products that are currently available to patients.”
Cresco Pharma Acquisition
While the reasoning behind its decision is not yet clear, it comes just weeks after it announced that its upcoming $2bn merger with Cresco Labs was nearing completion.
On July 8, the company announced that 98.5% of shareholders had voted to approve the deal at a special meeting, seeing 42.6% of stakeholders cast their vote.
A week later, in July 15, Columbia Care received ‘final order from the Supreme Court of British Columbia’ to go ahead with the deal, which will see Cresco acquire all the issued and outstanding shares in Columbia Care.
BusinessCann has previously reported that this deal, set to create a new entity that it says will have the largest annual revenue in the cannabis industry at roughly $1.4bn, would enable Cresco to break into international markets.
However, following the recent developments, it appears the newly formed entity will be squarely focused on the US market.