Los Angeles-based cannabis company MedMen Enterprises Inc. has entered an agreement to acquire competitor PharmaCann LLC for $682 million.

Founded in 2014 and based in Oak Park, Ill., PharmaCann is one of the largest medical cannabis providers in the U.S. It currently operates 10 retail stores and three cultivation and production facilities across multiple states.

The acquisition will expand MedMen's cultivation and production capabilities, with the merged company expected to operate 79 cannabis facilities in 12 states where MedMen and its pending acquisitions hold cannabis licenses, including Illinois, New York, Pennsylvania, Maryland, Massachusetts, Ohio, Virginia and Michigan.

Under the deal, MedMen Enterprises will issue class B subordinated voting shares as consideration, which will result in PharmaCann shareholders owning about 25% of the new company's fully diluted shares.

The closing of the transaction is subject to the approvals of both local and state regulatory authorities where PharmaCann's assets and licenses are held, along with the repayment of PharmaCann's debt and other customary closing conditions.

Both Medmen and PharmaCann's boards have unanimously approved the transaction.

Eight Capital provided a fairness opinion to MedMen's board, while Marquis Partners acted as financial adviser to PharmaCann on the transaction.

Culver City, Calif.-based MedMen Enterprises cultivates, produces and markets cannabis for recreational and medical use.