Canada-based C21 Investments is expanding into the Nevada marijuana market through an acquisition of Silver State Relief and Silver State Cultivation, a deal that’s valued at more than $50 million.
The investment, announced in a news release Monday, is the second move by C21 in what is expected to be a wave of Canadian acquisitions of U.S. cannabis companies.
Vancouver, British Columbia-based C21 said its Silver State acquisition is the first transaction in a larger plan to have cultivation, processing, wholesale distribution and retail operations throughout Nevada.
Silver State, one of the first two companies to receive a cannabis cultivation, production and retail license in Nevada, has generated revenue of $28.5 million in the past 12 months, according to the news release.
Under terms of the acquisition, C21:
- Makes a $20 million cash payment upon closing, plus grants 2.5 million shares of common stock when the deal closes.
- Gives Silver State a three-year, $14 million note (3% annual interest) at closing, in which the principal later could be converted into C21 common shares.
- Receives an option to acquire Silver State’s 155,000-square-foot cultivation facility and 8,000-square-foot dispensary in Sparks, Nevada, for $16 million.
- May exercise an option to acquire a dispensary property scheduled to open later this year in Fernley, Nevada, for $2.2 million.
C21 said it also plans to spend at least $10 million for additional expansion in Nevada.
The company, which trades on the Canadian Stock Exchange under the ticker symbol CXXI, was up 15% to 2.30 Canadian dollars a share as of early afternoon Monday.