(The headline on this story has been updated to clarify that Medicine Man Technologies is making the acquisition.)
Denver-based Medicine Man Technologies, a vertically integrated marijuana retailer, announced Tuesday it’s acquiring five Colorado cannabis shops from Starbuds in a $31 million cash and stock deal.
The companies entered into a binding term sheet that calls for Medicine Man Technologies to:
- Pay Colorado-headquartered Starbuds $15.5. million in cash.
- Issue the company more than 2.6 million shares of common stock priced at $2.98 per share.
- Arrange for a deferred cash payment of $7.75 million.
Medicine Man is projecting the five stores will generate $19 million in revenue this year, the company said in a statement.
The move adds to Medicine Man’s four existing Colorado storefronts and brings its total retail footprint to nine shops. The five Starbuds stores being acquired are in Commerce City, Louisville, Longmont, Niwot and Pueblo.
Medicine Man has been on an acquisition spree this year because of a change in Colorado law that allows for out-of-state investors to participate more freely in the market.
In June, Medicine Man Technologies acquired Sueños Farms, a large cultivation operation, and MesaPur, a dispensary and infused product maker that does business as Purplebee’s.
And in January, Medicine Man Technologies purchased MedPharm Holdings, a cannabis research and development company.
Medicine Man Technologies trades on over-the-counter markets under the ticker symbol MDCL.
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