Schwazze borrows $95 million, acquires New Mexico cannabis operations

Just Released! Get realistic market forecasts, state-by-state insights and benchmarks with the new 2024 MJBiz Factbook member program, now with quarterly updates. Make informed decisions.

Colorado cannabis company Schwazze raised $95 million in capital and struck a deal worth $42 million for acquisitions in New Mexico.

The $95 million capital raise includes $93 million worth of convertible notes that carry a 13% annual interest rate over a five-year term and are secured against company assets, according to a news release issued Friday.

Denver-based Schwazze “anticipates using the proceeds from the (notes) to fund the cash consideration of recently announced acquisitions and other growth and expansion initiatives,” the company said in the release.

Schwazze’s planned New Mexico acquisitions include “substantially all the operating assets” of Reynold Greenleaf & Associates, described as “a licensed medical cannabis provider with ten dispensaries, four cultivation facilities – three operating and one in development – and one manufacturing location.”

The deal includes the equity of Elemental Kitchen & Laboratory, described as a “manufacturing asset,” as well as the right to acquire the licenses of not-for-profit medical cannabis licensees Medzen Services and R. Greenleaf Organics.

According to the release, Schwazze’s New Mexico acquisitions will be worth $42 million, including $25 million in cash and a seller’s note worth $17 million.

The acquisitions are expected to close “within the next quarter,” subject to closing conditions and regulatory approvals.

“With this acquisition, Schwazze will become a multi-state operator with a total of 32 announced and acquired dispensaries, seven cultivation facilities and two manufacturing operations located in either Colorado or New Mexico,” Schwazze said in the release.

The learning curve for entering the cannabis industry is steep. Start with the fundamentals.

MJBiz Cannabis 101 Email Course

A 10-part email course designed to educate new hires and aspiring professionals on the key fundamental areas of the legal cannabis industry, including:

  • History of legal cannabis in America
  • Overview of plant-touching + ancillary business sectors
  • Cannabis finance and investing
  • Cannabis marketing and brand building
  • Employment + hiring opportunities
  • And much more!

Gain a comprehensive understanding of this complex industry with this free resource.

Schwazze has acquired a series of Colorado cannabis assets over the past year, including retail stores and cultivators.

The company formerly known as Medicine Man Technologies trades as SHWZ on the over-the-counter markets.

New Mexico’s recreational cannabis market is expected to launch in April.