Verano, a multi-state cannabis operator, has completed the previously announced acquisition of three subsidiaries of The Cannabist Company, a player in cannabis cultivation, manufacturing, and retail in the US for $105m.
Verano has acquired all ownership interests in Arizona-based 203 Organix and Salubrious Wellness Center, collectively known as the Arizona Operations.
The deal, announced in July, also includes Columbia Care Eastern Virginia, which operates in Virginia.
In Virginia, Verano will become the exclusive vertical cannabis operator in HSA 5, an area with nearly two million residents and 14 million annual tourists.
The expansion includes an active cultivation and production facility as well as six operational dispensaries located in Hampton, Norfolk, Portsmouth, Suffolk, Virginia Beach, and Williamsburg.
In Arizona, the multi-state cannabis operator enhances its presence by acquiring an active cultivation and production facility and increasing its retail footprint to eight locations.
This includes new stores in Tempe and Prescott, which will complement the existing six Zen Leaf dispensaries and multiple cultivation and processing facilities in the state.
Verano founder, chairman and CEO George Archos said: “Leveraging our extensive M&A history and experience, we are actively integrating these facilities into our network, and will build on our legacy as a top-tier medical operator in preparation for potential adult use in Virginia.”
The Cannabist Company will continue its operations in the Richmond region of Virginia (HSA 4), where it manages around 80,000ft2 of cultivation and manufacturing space, along with five active retail locations and one under development.
Following the completion of the Arizona transaction, The Cannabist Company will operate in 14 markets but plans to scale down to 12 markets once the exits in Florida and Washington, DC are finalised.
The total consideration for the Arizona Operations amounted to $15m, subject to adjustment, and was paid in cash at the time of signing.
For the Virginia Operations, the total consideration was $90m, also subject to adjustment. This payment was made upon closing and comprised $20m in cash, $40m in Class A subordinate voting shares, and a $30m promissory note.
The Cannabist Company CEO David Hart said: “This was a critical move for us as we continue our path of building a better business and reshaping our footprint to improve our financial footing, ultimately bringing us closer to profitability.”
