Cannabis MSO Vireo Growth continues buying spree, acquires Fluent in debt-for-stock deal

Cannabis multistate operator Vireo Growth’s buying spree continued Thursday when it picked up dozens of permits in Florida in a stock-for-debt deal.

The Minneapolis-based MSO is poised to become the third-largest operator in medical-only Florida’s multibillion-dollar market with its acquisition of Tampa-based Fluent, the companies announced.

Under terms of the deal, which is still subject to regulatory approval:

•  Vireo will acquire all of Fluent’s shares.
• Fluent shareholders will receive 0.07 in subordinate voting shares in Vireo for every Fluent share they hold.
• And in lieu of $30 million in outstanding debt, Fluent’s lenders will also receive Fluent shares, according to the companies.

What’s the biggest medical marijuana company in Florida?

The purchase of Fluent, a one-time investment vehicle for gardening giant Scotts Miracle-Gro’s foray into cannabis, follows Vireo’s initial expansion into Florida in January, when it bought Eaze, which operated 41 stores in the state under the Green Dragon brand.

Vireo will now operate 74 medical marijuana retail locations in Florida, according to a company press release.

“Florida’s limited-license structure rewards scale, and combining two complementary networks with minimal overlap creates a platform that is meaningfully harder to replicate,” John Mazarakis, Vireo’s CEO, said in a statement.

Fluent, which generated $71.5 million in sales from its Florida operations, is also taking “certain steps to right-size the business” ahead of the deal’s closure, he added.

He did not share specifics.

“The business we receive at closing we believe will be positioned to generate meaningful cash flow before we apply a single Vireo synergy.”

Only Tallahassee-based Trulieve Cannabis Corp (168) and Verano Holdings Corp., which operates the Müv brand (85), will have more Florida dispensaries if the Vireo-Fluent deal closes, according to state data.

Despite slow patient growth, Florida remains the strongest medical-only market in the U.S. Two attempts to legalize adult-use cannabis, both led by Trulieve, have failed amid staunch opposition from Republican state elected officials.

What will marijuana MSO Vireo buy next?

The deal is only the latest in a Vireo buying frenzy that began even before President Donald Trump’s Dec.18 marijuana rescheduling executive order kicked off an M&A flurry.

Other deals include:

• An 86% stake in Colorado-based MSO Schwazze in October
• The December purchase of PharmaCann assets in Colorado for $49 million
• The January acquisition of The Hawthorne Gardening Co., Scotts Miracle-Gro’s cannabis-oriented subsidiary

In a company earnings call earlier this year, Mazarakis indicated more growth was on the company’s radar.

”We’re trying to build scale right now, and I think this is the time to do it,” he said.

Vireo also appears to have lower long-term liabilities than some other operators, including both debt and 280E tax liabilities.

In a March earnings call, Vireo reported $10.2 million in deferred tax liabilities and a debt obligation of $136 million.