Marijuana multistate operator 4Front Ventures signed a definitive agreement to acquire Massachusetts-based cultivator New England Cannabis Corp. (NECC) for $55 million, a move intended to expand 4Front’s wholesale operation in the state’s fast-growing adult-use market.
Arizona-based 4Front said in a news release that the purchase will be funded with $25 million in cash and 25 million shares of stock.
The cash portion will be financed partly through proceeds from the sale of $15 million of three-year convertible notes, 4Front said. That deal is being led by Navy Capital.
The NECC acquisition will more than double 4Front’s total flower canopy in Massachusetts to 30,000 square feet, with the potential of adding 10,000 square feet.
The acquisition, which is expected to close in the fourth quarter, also will roughly triple 4Front’s kitchen, processing and distribution space.
4Front is trading at slightly more than $1 a share on the U.S. over-the-counter markets under the ticker symbol FFNTF. The company also trades on the Canadian Securities Exchange as FFNT.
Adult-use sales in Massachusetts are on a record pace and on the verge of exceeding $1 billion for the year.
Sales to date this year total $985 million, according to the state Cannabis Control Commission.