Jushi Holdings Inc. (“Jushi” or the “Company”) (CSE: JUSH)
(OTCQX: JUSHF), a globally-focused, multi-state cannabis
and hemp operator, has reached a definitive binding agreement (the
“Agreement”) to acquire 100% of the equity of Pennsylvania Medical
Solutions, LLC (the “Permittee”), a Pennsylvania grower-processor
owned by Vireo Health International, Inc. (“Vireo”) (CNSX: VREO;
OTCQX: VREOF) (the “Proposed Acquisition”). The Permittee
operates a 90,000 sq. ft. facility with approximately 45,000 sq.
ft. of high-quality, indoor cultivation when construction is
complete. The Permittee’s property can further accommodate an
additional 25,000 sq. ft. of indoor cultivation bringing the total
to 70,000 sq. ft. The Proposed Acquisition will solidify Jushi’s
leadership position in Pennsylvania by adding equity ownership of
Permittee, with its large-scale, high-quality, indoor cannabis
cultivation and processing capabilities, to its other subsidiaries’
collective rights to operate up to 15 dispensaries. 1
Proposed Equity Acquisition
Highlights:
- The facility produces high-quality, indoor grown flower,
extracts, and concentrates;
- An expansion currently underway is expected to be completed by
mid-2020;
- Increasing indoor cultivation from 20,000 sq. ft. to 45,000 sq.
ft. of cultivation;2
- Supplementing current CO2 extraction with a new Class I,
Division 1 ethanol extraction room;
- Post-expansion, the facility is expected to produce between 800
to 1,000 lbs. of dried flower per month;
- The facility is expected to supply the Company’s subsidiaries,
and other licensed retail facilities.
“This acquisition allows Jushi to expand its
presence in one of the most attractive medical cannabis markets in
the country,” said Jim Cacioppo, Chairman and Chief Executive
Officer of Jushi. “Upon completion Jushi will be able to provide
high-quality, indoor flower and concentrates to our Pennsylvania
patients who continue to experience constrained supply and high
prices. Furthermore, we will be well-positioned to support an
increase in demand and maintain the ability to further scale up the
facility if required.”
Under the terms of the Agreement, Jushi will pay
Vireo (subject to purchase price adjustments) US$16.3 million in
cash, a US$3.8 million seller note,3 and assume a US$17 million
facility associated with a long-term lease obligation. No equity
will be issued in connection with this acquisition. Jushi intends
to fund the cash portion of the Agreement with the proceeds from
the debt financing, which Jushi announced concurrently with this
announcement. The parties anticipate closing the Agreement by the
end of August 2020.
As part of the Agreement, at closing, Jushi will
have an assignable purchase option (“Option”) to acquire 100% of
the equity of Pennsylvania Dispensary Solutions, LLC (“PADS”), a
Pennsylvania medical marijuana dispensary permittee in the
Commonwealth’s Northeast region. PADS currently operates two
medical marijuana dispensaries in Scranton and Bethlehem, with the
right to operate one additional dispensary in the region. The
Option expires 18 months from closing of the Agreement, and is
subject to certain closing conditions, including approvals from all
applicable regulatory authorities. Since inception, Pennsylvania's
medical cannabis total marketplace has had a total of US$524
million in sales — US$215 million in purchases made by dispensaries
from grower-processors and US$309 million made by patients and
caregivers at licensed dispensaries. Currently, there are roughly
80 operational Pennsylvania dispensaries and 297,317 medical
marijuana patients and 29,040 caregivers registered in the Program,
according to the Pennsylvania Department of Health.
The Proposed Acquisition is subject to certain
closing conditions, including approvals from regulatory
authorities. There can be no assurance that the transaction will be
completed.
Jushi is reaffirming its 2021 revenue guidance
of $200 to $250 million and will provide more detail at the
expected close of the Proposed Acquisition.
_______________________1 Seven stores are
currently operational. Includes three additional stores related to
an equity investment under definitive agreement 2 Preliminary
expansion capacity, subject to completion of additional due
diligence3 8% unsecured seller note, four-year maturity, with all
principal and interest due at maturity
About Jushi Holdings Inc. We are a
globally focused cannabis and hemp company led by an
industry-leading management team. In the United States, Jushi is
focused on building a multi-state portfolio of branded cannabis and
hemp-derived assets through opportunistic acquisitions, distressed
workouts and competitive applications. Jushi strives to maximize
shareholder value while delivering high-quality products across all
levels of the cannabis and hemp ecosystem. For more information,
please visit https://www.jushico.com/ or on Facebook, Twitter, or
LinkedIn.
About Vireo Health International,
Inc.
Vireo Health International, Inc. is a physician-led
cannabis company focused on building long-term, sustainable value
by bringing the best of medicine, science, and engineering to the
cannabis industry. With operations strategically located in
early-stage, limited-license medical markets, Vireo manufactures
pharmaceutical-grade cannabis products in environmentally-friendly
greenhouses and distributes its products through its growing
network of Green Goods™ retail dispensaries and hundreds of
third-party locations. Its current core medical markets of New
York, Minnesota, Pennsylvania, Arizona, New Mexico, and Maryland
all have the potential to enact adult-use legalization in the next
three to 24 months, and two additional markets in Puerto Rico and
Massachusetts also have potential for commercialization. Combined
with its teams' focus on driving scientific innovation within the
industry and securing meaningful intellectual property, Vireo
believes it is well positioned to become a global market leader in
the cannabis industry. Today, eight of its 10 markets are
operational with 13 of its 32 total retail dispensary licenses open
for business. For more information about the company, please visit
www.vireohealth.com.
Forward-Looking Information and
Statements This press release contains certain
"forward-looking information" within the meaning of applicable
Canadian securities legislation and may also contain statements
that may constitute "forward-looking statements" within the meaning
of the safe harbor provisions of the United States Private
Securities Litigation Reform Act of 1995. Such forward-looking
information and forward-looking statements are not representative
of historical facts or information or current conditions, but
instead represent only the Company’s beliefs regarding future
events, plans or objectives, many of which, by their nature, are
inherently uncertain and outside of the Company’s control.
Generally, such forward-looking information or forward-looking
statements can be identified by the use of forward-looking
terminology such as “plans,” “expects” or “does not expect,” “is
expected,” “budget,” “scheduled,” “estimates,” “forecasts,”
“intends,” “anticipates” or “does not anticipate,” or “believes,”
or variations of such words and phrases or may contain statements
that certain actions, events or results “may,” “could,” “would,”
“might” or “will be taken,” “will continue,” “will occur” or “will
be achieved”. The forward-looking information and forward-looking
statements contained herein may include, but are not limited to,
information concerning the expectations regarding Jushi, or the
ability of Jushi to successfully achieve business objectives, and
expectations for other economic, business, and/or competitive
factors.
By identifying such information and statements in
this manner, the Company is alerting the reader that such
information and statements are subject to known and unknown risks,
uncertainties and other factors that may cause the actual results,
level of activity, performance or achievements of the Company to be
materially different from those expressed or implied by such
information and statements. In addition, in connection with the
forward-looking information and forward-looking statements
contained in this press release, the Company has made certain
assumptions. Among the key factors that could cause actual results
to differ materially from those projected in the forward-looking
information and statements are the following: the ability of Jushi
to successfully achieve business objectives, including with
regulatory bodies, employees, suppliers, customers and competitors;
changes in general economic, business and political conditions,
including changes in the financial markets; changes in applicable
laws; and compliance with extensive government regulation, as well
as other risks and uncertainties which are more fully described in
the Company’s Annual Information Statement dated June 1, 2020 and
other filings with securities and regulatory authorities which are
available at www.sedar.com. Should one or more of these
risks, uncertainties or other factors materialize, or should
assumptions underlying the forward-looking information or
statements prove incorrect, actual results may vary materially from
those described herein as intended, planned, anticipated, believed,
estimated or expected.
Although the Company believes that the assumptions
and factors used in preparing, and the expectations contained in,
the forward-looking information and statements are reasonable,
undue reliance should not be placed on such information and
statements, and no assurance or guarantee can be given that such
forward-looking information and statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such information and
statements. The forward-looking information and forward-looking
statements contained in this press release are made as of the date
of this press release, and the Company does not undertake to update
any forward-looking information and/or forward-looking statements
that are contained or referenced herein, except in accordance with
applicable securities laws. All subsequent written and oral
forward-looking information and statements attributable to the
Company or persons acting on its behalf is expressly qualified in
its entirety by this notice.
Investor Relations Contact:
Michael Perlman Executive Vice President of Investor Relations and
Treasury 561-453-1308 Investors@jushico.com
Media Contact: Ellen Mellody
MATTIO Communications 570-209-2947 Ellen@Mattio.com
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