Cannex buys US marijuana firm Jetty Extracts for up to $30 million

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Vancouver, Canada-based Cannex agreed to purchase California infused products company Jetty Extracts in a deal worth up to $30 million, becoming the latest marijuana-related acquisition in the United States with such a price tag.

In late March, Las Vegas-based GB Sciences signed a letter of intent to purchase NevadaPure’s Las Vegas operation for $33 million. NevadaPure is a vertically integrated medical marijuana business.

The approximately $30 million price tag for each company is notable for the U.S. marijuana industry, where businesses typically trade hands for much less.

According to a news release, Jetty Extracts, founded in 2013, has a licensed 12,000-square-foot facility in Oakland. The company distributed infused products to more than 600 California dispensaries in 2017.

Jetty has more than 60 staffers, a distribution network throughout the Golden State and partnerships with vaporizer companies, retailers, delivery firms and others, according to the release.

Cannex will pay an initial $22.5 million, along with an additional $7.5 million provided Jetty meets certain performance targets.

The Canadian company provides services that include real estate, management, financial, branding and IP to licensed cannabis business operators domestically and internationally.

The acquisition comes after GB Sciences said in late March it would pay $28 million in cash and assume about $5 million in debt for NevadaPure’s Las Vegas business.

According to a release, the annualized sales run rate of NevadaPure is over $16 million based on its performance since adult-use cannabis became legal in Nevada in July 2017.

The deal adds three Nevada licenses to GB Science’s portfolio, including cultivation, production and dispensary licenses. The company plans to leverage the vertical integration model to cut out any intermediaries.

GB Sciences will take over a lease of a 72,000-square-foot building, which is currently producing 350 pounds of dried cannabis flower per month, with a growing capacity of 12,000 pounds of MJ per year.