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Jushi Expands Presence In Pennsylvania, Buys Vireo Assets

June 22, 2020 1:01 pm
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Jushi Expands Presence In Pennsylvania, Buys Vireo Assets

Cannabis and hemp company Jushi Holdings Inc. (CSE:JUSH) (OTCQX: JUSHF) agreed to acquire Vireo Health International Inc.’s (CSE:VREO) (OTCQX: VREOF) Pennsylvania-based subsidiary in a $37 million deal.

Through the deal, Jushi will acquire a 90,000 square-foot facility with roughly 45,000 square feet of indoor cannabis cultivation once construction finalizes.

In addition, the facility manufactures indoor-grown flower, extracts, and concentrates.

Vireo’s subsidiary, Pennsylvania Medical Solutions LLC, can expand indoor cultivation by additional 25,000 square feet. The deadline for the current expansion is in mid-2020.

Jushi agreed to pay $16.3 million in cash, $3.8 million through a seller note, carrying a coupon rate of 8% per quarter, and assume a $17 million facility related to the long-term lease obligation.

Upon closing the acquisition, Jushi can obtain Pennsylvania Dispensary Solutions LLC – another company owned by Vireo – for an additional $5 million paid in cash.

The deadline for that purchase is 18 months, once the agreement is closed.

Jushi’s chairman and CEO Jim Cacioppo highlighted the acquisition allows the company to increase its footprint within the Pennsylvania cannabis market.

“Upon completion, Jushi will be able to provide high-quality, indoor flower and concentrates to our Pennsylvania patients who continue to experience constrained supply and high prices,” said Cacioppo in a Monday press release.

The company said Monday it received $12.35 million in the financing, following the announcement of the receipt of binding subscriptions totaling roughly $15.25 million.

In addition, Jushi intends to utilize the funds to cover the part of acquisition expenses.

Both parties expect to close the deal by the end of August.

This month, the company cut the ribbon on its seventh Beyond/Hello medical marijuana dispensary in the state.

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