ACE Ventures and Goodness Growth announced that they have executed a binding term sheet whereby Ace plans to acquire assets of Goodness Growth Holdings subsidiary, Vireo Health of New York (VireoNY).
Terms of the transaction include a purchase price between $3 million and $5 million for Vireo Health of New York’s licenses, inventory and assets, as well as Ace’s assumption of the lease agreement with Innovative Industrial Properties (IIP) for the Johnstown, New York cannabis cultivation and manufacturing campus. Ace has agreed to assume VireoNY’s financial liabilities, including its operating losses, beginning on April 1, 2024. These activities are expected to be supported initially by a $2.5 million unsecured loan from Goodness Growth to VireoNY.
In addition, the parties are committed to a collaborative advisory agreement that retains Goodness Growth’s management and compliance oversight in return for an approximate 15 percent share of net profits. Goodness Growth and Ace anticipate regulatory approval for the transfer of the New York licenses, as well as closing of the VireoNY transaction, to occur by June 30, 2024.
Goodness Growth also announced in conjunction with the VireoNY transaction that it has executed an eighth amendment to its lease with IIP for the Johnstown, NY cannabis cultivation and manufacturing campus. The amendment to the Johnstown campus lease extends a lease termination option until June 30, 2024, and adds a purchase option of the facility for the tenant.
Ace Venture Enterprises is committed to providing an investment of $20 million to fund the development of the license and support the transfer of the IIP lease, and intends to acquire the Johnstown cannabis cultivation and manufacturing campus from IIP by executing the two-year purchase option.
