Florida-based Jushi Holdings, a multistate marijuana and hemp company, agreed to purchase Vireo Health International’s grower-processor operations in Pennsylvania for $37 million.
The acquisition involves the purchase of Pennsylvania Medical Solutions (PAMS), a licensed medical marijuana grower-processor in Scranton owned by Vireo, an MSO based in Minneapolis.
PAMS manufactures cannabis-based products in a 90,000-square-foot, co-located cultivation and processing facility.
According to a news release, Jushi will:
- Pay $16.3 million in cash.
- Pay a $3.8 million seller note at 8% interest maturing in four years.
- Assume a $17 million facility associated with a long-term lease obligation. No equity is involved in the transaction.
“This acquisition allows Jushi to expand its presence in one of the most attractive medical cannabis markets in the country,” Jushi CEO Jim Cacioppo said in the release.
The deal also includes an 18-month option for Jushi to purchase equity in another Vireo Health subsidiary, Pennsylvania Dispensary Solutions, for an additional $5 million in cash.
Meanwhile, Jushi expects to receive the debt funding on or before July 11. The notes will mature on Jan. 15, 2023, with a 10% yearly interest.
According to a Vireo news release, the PAMS facility recently underwent a significant expansion in order to meet increasing medical marijuana demand in Pennsylvania.
“This transaction secures Vireo’s capital position for the foreseeable future and will enable us to comfortably execute our fiscal year 2020 operating strategy and begin generating positive cash flow in the first half of next year without requiring any additional capital infusions,” Vireo founder and CEO Kyle Kingsley said in the release.