Debra BorchardtVerano Holdings Corp. (Cboe CA: VRNO) (OTCQX: VRNOF) told investors it has closed on its previously announced acquisitions in Arizona and Virginia. As recently as July 29, Verano announced it intended to buy three subsidiaries from The Cannabist Company (Cboe CA: CBST) (OTCQX: CBSTF). The deal included Arizona properties 203 Organix, L.L.C. and Salubrious Wellness Center, Inc. and Virginia-based Columbia Care Eastern Virginia LLC.
Verano paid $15 million in cash for the Arizona operations. It paid $90 million for the Virginia operations, which consisted of $20 million in cash, $40 million in Class A subordinate voting shares, and the issuance of a $30 million promissory note.
Virginia
“Our entrance into Virginia provides near-term growth potential within the existing medical program, and adds yet another valuable market to our footprint with a high probability of adult use in the near future,” said George Archos, Verano founder, Chairman and Chief Executive Officer. “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 Virginia Operations include one cultivation and production facility and six dispensaries. Verano will become the sole cannabis operator and retailer for HSA 5 in Eastern Virginia, which is home to nearly two million residents. Another plus is that 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.
The Cannabist Company said it would 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.
“Verano has been a great partner through a very thoughtful transaction, and we are excited for what the future holds for our Eastern Virginia and Arizona teams with Verano. 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. We look forward to working alongside Verano in Virginia as we continue in the Richmond region to support a growing medical program and look toward the future of adult use,” said David Hart, CEO, The Cannabist Company.
With the close of the Arizona transaction, The Cannabist Company now operates in 14 markets, which will be reduced to 12 markets once the exits in Florida and Washington, DC are finalized.
Arizona
Archos went on to say. “Additionally, expanding our Arizona operations allows us to further scale our retail footprint and broaden access to our award-winning brand portfolio with increased cultivation capacity and high-performing dispensaries in attractive locations in Prescott and Tempe.”
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 now operate eight dispensaries in Arizona adding one in Tempe and one in Prescott.
