It appears that Vireo Health (CSE: VREO) is in the process of selling off assets. It was announced this morning that Jushi Holdings (CSE: JUSH) will be acquiring the firms Pennsylvania Medical Solutions, LLC, the operator of a 90,000 square production facility with 45,000 square feet of indoor cultivation.
The facility can accommodate a further 25,000 square feet of production if needed, while there is also an ongoing expansion underway at the property to increase cultivation from 20,000 square feet to 45,000 by mid-year. Once completed, the facility is anticipated to produce 800 to 1,000 pounds of dried flower a month.
Under the terms of the transaction, Jushi will pay US$16.3 million in cash for 100% equity in what they refer to as the “permittee”. A US$3.8 million seller note will also be issued in connection with the sale, along with the assumption of a US$17 million facility with a long-term lease obligation. No equity will be issued in connection with Jushi’s purchase.
Jushi will also obtain an option to acquire a 100% interest in Pennsylvania Dispensary Solutions, LLC in connection with the offer, a permitee for dispensary operations in the Northeast region of the state.
Subsequently, Jushi also announced a US$15.25 million financing via the issuance of senior secured notes bearing interest at 10% per annum, along with subordinate voting share warrants. The notes are to mature January 15, 2023. Warrant coverage is to amount to 75% of the offering, with any warrants issued having an expiry of December 23, 2024 and an exercise price of US$1.25 (C$1.70).
US$15.0 million of the offering will be utilized to purchase the Pennsylvania facility, with interest having been shown for up to an additional $10 million in financing.
The financing is to close in connection with the asset purchase from Vireo, which is anticipated to occur by the end of August 2020.
Lastly, Jushi also reaffirmed its 2021 revenues guidance of $200 to $250 million, with more details to be provided on the closing of the Pennsylvania asset purchase.
Jushi Holdings last traded at $1.75 on the CSE.
Information for this briefing was found via Sedar, Jushi Holdings and Vireo Health. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
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