Cannabis and hemp company Jushi Holdings Inc. JUSH JUSHF has finalized a previously announced purchase of Vireo Health International Inc.'s VREO VREOF Pennsylvania-based subsidiary.
Under the deal, Vireo sold Pennsylvania Medical Solutions LLC to Jushi Inc. — a Jushi Holdings subsidiary — for $37 million.
"We are thrilled to close this acquisition ahead of our original schedule," stated Jushi chairman and CEO Jim Cacioppo.
The price tag includes $16.3 million in cash, $3.8 million through a four-year note carrying a coupon rate of 8% payable every three months, and $17 million facility concerning the long-term lease obligation.
The agreement also allows Jushi to acquire Pennsylvania Dispensary Solutions LLC — another Vireo subsidiary — for an additional $5 million paid in cash.
Vireo will utilize the proceeds to fund capital expenditures that would enhance scale in its key markets of New York, Minnesota, Maryland, Arizona, and New Mexico.
According to a Wednesday press release, Jushi will obtain a 90,000 square feet cultivation and processing facility.
The facility is expanded recently and now encompasses around 45,000 square feet of indoor cultivation, with a possibility to further boost the indoor cultivation by roughly 55% to a total of 70,000 square feet.
In addition, the Boca Raton, Florida-based company, expects the facility will yield between 800 to 1,000 lbs. of dried flower monthly.
Vireo founder and CEO Kyle Kingsley explained that the sale of its Pennsylvania-based equity would set the company on the track to generate positive cash flow in the first half of 2021, without additional financing.
"We are pleased to complete this milestone transaction, which creates value for our shareholders without the dilutive impacts of other forms of financing," continued Kingsley.
Recently, Jushi upsized and closed its financing deal, securing $33 million in funding.
"We are well capitalized to optimize the Facility's production and continue to build-out our Pennsylvania retail footprint," added Cacioppo.
The agreement also included a debt financing round led by Navy Capital Green Management LLC, with an $11.5 million investment.
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