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Vireo Health International Enters New Mexico Cannabis Market With Red Barn Acquisition

March 28, 2019 3:36 pm
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Vireo Health International Enters New Mexico Cannabis Market With Red Barn Acquisition

Vireo Health International, Inc. (OTC:VREOF) is expanding in New Mexico through the acquisition of the entity that manages the Red Barn, a holder of a medical cannabis license in New Mexico.

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What Happened

The transaction is being financed through a combination of cash and stock, Vireo said. Once completed, Vireo will have access to Red Barn's dispensaries in Santa Fe and Gallup and a cultivation and processing facility in Gallup. 

The announcement comes three days after Vireo Health said it would enter the Arizona market through the acquisition of four entities that together manage Arizona Natural Remedies, which operates a cultivation and processing facility in Amado; a wholesale business; and a dispensary in Phoenix.

On Tuesday, Vireo Health commenced trading on the Canadian Securities Exchange after it completed a reverse takeover of Darien Business Development Corp. In connection with the RTO, Vireo raised more than $50 million through brokered and non-brokered private placement offerings. 

Why It's Important

For U.S. multistate operators, M&A has become a common practice of expanding into new states, as there are a limited number of licenses issued.

The acquisition of businesses in New Mexico and Arizona allows Vireo to establish itself in the Southwest region. The company also has operations in Maryland, Minnesota, New York, Ohio, Pennsylvania and Rhode Island. 

"Arizona and New Mexico’s well-established medical cannabis markets present us with fantastic opportunities to help more patients," Vireo CEO Kyle Kingsley, M.D., told Benzinga. 

"Both Arizona Natural Remedies and Red Barn are well-respected operators, and we look forward to welcoming them into the Vireo Family and continuing to provide their patients with top-quality cannabis products and unrivaled patient experiences."

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