Cresco Labs (CSE:CL,OTCQX:CRLBF) confirmed on Tuesday (October 22) that the waiting period under the Hart-Scott-Rodino Antitrust Improvements (HSR) Act has expired on its planned acquisition of Origin House (CSE:OH,OTCQX:ORHOF).

The expiration of the waiting period satisfies one of the conditions necessary to complete the deal, bringing the Illinois-based multi-state operator that much closer to closing the C$1.1 billion acquisition.

It was originally agreed upon in April of this year, and Cresco Labs said at the time that it was the largest public company transaction in the history of the US cannabis space.

Cresco Labs told investors on Tuesday that the two firms are now working on closing the deal with new terms they can both agree on.

Marc Lustig, CEO of Ontario-based Origin House, called the expiration of the review period an important development for the deal itself and the cannabis industry at large.

The HSR expiration follows the submission of certifications of substantial compliance to the antitrust division of the US Department of Justice (DOJ). The certifications were sent in September from both companies after the HSR waiting period was extended when second requests were made to the firms.

The federal agency steps in with these reviews to make sure mergers, acquisitions and transfers of securities and assets don’t create industry monopolies.

Now that the waiting period is over, Cresco Labs is free to close the deal, barring an injunction issued against the transaction by the DOJ. The two companies have until November 15 to complete it.

The deal will further Cresco Labs’ stake in California through Origin House’s distribution network and presence in the state.

During an earnings call in August, Cresco Labs CEO Charlie Bachtell said scrutiny from the DOJ is beneficial to the sector overall. “The fact that a federal agency is reviewing (a mergers and acquisitions) transaction in this industry must be seen as validation,” he said.

Other large cannabis deal under review in the US

Cresco Labs’ proposed deal isn’t the only large-scale cannabis acquisition currently under review by the federal agency in the US.

Curaleaf Holdings’ (CSE:CURA) US$875 million acquisition of Grassroots has also been subjected to HSR requirements.

At a recent Canaccord Genuity investor event, Curaleaf Chairman Boris Jordan said the DOJ has been cooperative during the review process and suggested that the federal agency is using the time to “get an education on the sector.”

A planned merger between MedMen Enterprises (CSE:MMEN,OTCQX:MMNFF) and privately owned PharmaCann was under review as well, but is no longer after MedMen pulled out of the deal in October.

Don’t forget to follow us @INN_Cannabis for real-time news updates!

Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article.

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