Cannabis company Curaleaf Holdings said it's buying Grassroots, giving Curaleaf a foothold on the burgeoning market in the Midwest and sending its stock soaring 15% Wednesday.
The $875 million cash-and-stock deal for Grassroots, formally known as GR Companies, would bring Curaleaf's products to 19 states, up from 12, Curaleaf said. The deal would also give the Wakefield, Massachusetts-based Curaleaf access to Illinois and Michigan, two states that have legalized recreational pot.
Curaleaf grows and sells marijuana, as well as pot-infused oils, lotions and edibles. It also operates dispensaries. Grassroots also grows and sells marijuana.
Curaleaf expanded to the West Coast earlier this year when it acquired Cura Partners' Select brand. Curaleaf built its initial footprint along the East Coast in states such as New York, Maryland and Florida.
"This basically fills out the footprint for us to sell our products across all major markets in the United States," Curaleaf Executive Chairman Boris Jordan said in an interview with CNBC's "Squawk Alley" on Wednesday.
Curaleaf is expanding rapidly as the cannabis industry booms. Eleven states have legalized recreational weed. Congress last year legalized CBD, a non-psychoactive compound derived from hemp, sparking a surge of interest from both consumers and consumer products companies.
"We're starting to see most of the major states in the United States at least starting to review going recreational for adult use," Jordan said, adding that the next frontier for Curaleaf is Europe.
Jordan said the momentum goes beyond politics. Just a few years ago, he said no one would answer his calls about joining a cannabis company.
"Now, they're calling us and saying we would love to come work for you," he said.