Ohio Dispensary Sale To Fund Retail Expansion In Other States? This Cannabis Co. Shifts Focus

Zinger Key Points
  • Body and Mind's DEP Nevada closed a deal to sell the Body and Mind Ohio dispensary for $8.225 million in cash.
  • The company fully repaid its $7.33 million debt to its senior secured lender.

Body and Mind Inc. BAMM BMMJ said on Wednesday that its wholly owned subsidiary, DEP Nevada, Inc., has closed the previously announced transaction to sell all of its interests in the Body and Mind Ohio dispensary for $8.225 million in cash.

What Happened

DEP Nevada entered into an equity purchase agreement with FarmaceuticalRX, LLC in July, whereby DEP agreed to sell all of the issued and outstanding interests, equity or profit interests in NMG OH 1, LLC, which owns and operates the Body and Mind Ohio dispensary, to the purchaser.

The deal includes an additional $2.5 million in potential contingent proceeds.

Simultaneously with the closing of the disposition of the dispensary, the company has fully repaid its $7.33 million debt owing to its senior secured lender.

Why It Matters

The Las Vegas company plans to use the proceeds from the disposition of the dispensary to fund the development of its retail assets in Illinois and New Jersey.

"The closing of the Ohio dispensary divestment and early repayment of our senior secured debt allows us to continue to develop our prime retail assets in Illinois and New Jersey, substantially lowers our interest expenses by roughly US$1 million per year and provides the potential for BaM to benefit from future Ohio adult use legalization," Body and Mind CEO Michael Mills said.

The Body and Mind Ohio dispensary opened in 2019.

What's Next

Mills explained in a press release what's next for the company.

"We remain hyper-focused on building a strong operations-centric portfolio of cannabis dispensaries," he said. "Our dispensary in Markam, Illinois, will be hosting a customer appreciation day on October 20th with an opportunity for customers to connect with many local and national brands."

Mills also provided an update on constructing the new dispensaries in Illinois and New Jersey.

"Dispensary construction in Lynnwood, Illinois, is progressing with all walls complete, roof trusses installed and earthworks ongoing," he said. "The dispensary license in Lawrenceville, New Jersey, continues to be in the permitting process for its annual license and approval of the building permit. We look forward to providing updates on our continued progress in the future."

BMJ Price Action

Body and Mind's shares traded 23.5968% lower at $0.0667 per share at the time of writing on Wednesday morning.

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