Cannabis company Verano has signed a deal with Cannabist, an American cannabis cultivator, manufacturer, and retailer, to acquire full ownership interests of the latter’s three subsidiaries for $105m.
The subsidiaries include 203 Organix and Salubrious Wellness Center, which operate in Arizona, and Columbia Care Eastern Virginia, which is active in Virginia.
The Virginia operations consist of a cultivation and production facility and six dispensaries.
The cannabis programme in the region is designed to assign each of its five Health Service Areas (HSAs) to a single cannabis operator and retailer.
Verano will become the exclusive operator and retailer for HSA 5 in Eastern Virginia.
The state’s legal cannabis programme also supports statewide home delivery and wholesale opportunities, enabling Verano to serve patients across the Commonwealth.
The total consideration for Columbia Care Eastern Virginia is $90m, which is subject to adjustment.
At closing, Verano will pay $20m in cash, issue $40m in Class A subordinate voting shares, and provide a $30m promissory note.
The Arizona operations include a cultivation facility, one production facility, and two dispensaries.
Verano’s cultivation footprint in Arizona will expand to 90,000ft2 across three facilities, and the company will operate eight dispensaries in the state, adding locations in the Tempe and Prescott regions.
The total consideration for the Arizona operations is $15m, payable in cash.
Verano chairman and CEO George Archos said: “This opportunity greatly increases Verano’s growth trajectory as we gain access to the coveted market of Virginia ahead of an adult use program and deepens our footprint in Arizona.”
Following the acquisitions, Verano will expand its presence to 14 states, operating 15 cultivation and production facilities, and 150 dispensaries.
Cannabist will continue to operate its Virginia facilities in the Richmond region (HSA 4), which includes about 80,000ft2 of cultivation and manufacturing space and six retail locations.
After exiting the Arizona market, Cannabist will operate in 13 markets, considering previously announced divestitures pending future closing.
Cannabist CEO David Hart said: “As mentioned in previous announcements, we are continuing to optimize our footprint as we target building a better business, which includes deleveraging our balance sheet.”
The closing of the acquisitions for the Arizona operations and the Virginia operations is contingent upon meeting certain conditions, including obtaining approval from relevant regulatory authorities.
