Vireo Health has announced that the company has reached the definitive agreement with Jushi Holdings for the sale of Pennsylvania Medical Solutions for the total consideration of $37 million. The company has further added that the transaction is subject to the regulatory approvals.
The company has further added that the Pennsylvania Medical Solutions has a permit for the processing and cultivation of cannabis for medical purposes in the state of Pennsylvania. The company has added that the permit was awarded via merit-based applications in 2017. The company is based in Scranton, Pennsylvania and manufactures cannabis-based products in a 90,000 square foot processing and cultivation facility.
The transaction of Pennsylvania Medical Solutions for total consideration of $37 million, which includes the $3.8 million in the form of a 4-year note, $17 million in Right of Use liabilities associated with long-term lease obligations and $16.3 million in cash. The transaction also allows Joshi Holdings to purchase equity in another subsidiary of Vireo Health for an additional $5 million in cash.
Chief Executive Officer and Founder of Vireo Health, Kyle Kingsley said, “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.”
“We’re especially pleased to achieve this milestone for shareholders without the dilutive impacts of other forms of financing, and we’re also very excited about the opportunities in front of us to re-invest a portion of these proceeds to increase scale in select markets where we see significant opportunities to improve revenue growth and future cash flow generation,” Chief Executive Officer and Founder of Vireo Health Kyle Kingsley further added.