Multi-state cannabis operator Verano today announced that it has entered into agreements to acquire all of the ownership interests of three subsidiaries of The Cannabist Company.
Two subsidiaries, 203 Organix and Salubrious Wellness Center operate in Arizona, and the third subsidiary, Columbia Care Eastern Virginia, operates in Virginia.
The Virginia Operations include one cultivation and production facility and six dispensaries.
Virginia’s cannabis program is structured in that the Commonwealth is split into five Health Service Areas (HSAs) with only one cannabis operator and retailer permitted to service each HSA.
Verano will become the sole cannabis operator and retailer for HSA 5 in Eastern Virginia.
HSA 5 is home to nearly two million residents, serving populated areas such as Virginia Beach, Chesapeake, and Norfolk.
Virginia’s legal cannabis program permits home delivery throughout the Commonwealth as well as wholesale opportunities to other HSAs, providing Verano the ability to serve patients statewide.
Total consideration for the Virginia Operation, subject to adjustment, is $90 million. Upon Closing, Verano will pay closing consideration of $20 million in cash, $40 million in Class A subordinate voting shares, and issue a $30 million promissory note.
The Arizona Operations include one cultivation facility, one production facility, and two dispensaries.
Verano’s total Arizona cultivation footprint will expand to 90,000 square feet across three facilities.
Verano will operate eight dispensaries in Arizona adding one in Tempe and one in Prescott.
Total consideration for the Arizona Operations is $15 million, payable in cash.
Once closed, the acquisitions will bring Verano’s geographic footprint to 14 states, 15 cultivation and production facilities, and 150 dispensaries.
The Cannabist Company will maintain its Virginia operations in the Richmond region (HSA 4), with approximately 80,000 square feet of cultivation and manufacturing capacity, five retail locations in operation and one in development. Upon exit of the Arizona market, the Cannabist Company’s operational footprint will be in 13 markets, including previously announced divestitures that are subject to future closing.
