Jushi Holdings Enters Virginia Medical Cannabis Market with $16 Million Investment

Jushi Holdings Inc. Continues Expansion in the Northeastern U.S. by Entering into Acquisition of Virginia-Based Pharmaceutical Processor for Medical Cannabis Extracts

– Dalitso LLC holds 1 of 5 conditionally approved applications in Virginia

– Acquisition executes on the Company’s US strategy to continue establishing its presence in limited license states

BOCA RATON, Fla., July 8, 2019 /CNW/ — Jushi Holdings Inc. (“Jushi” or the “Company”)(NEO: JUSH.B), a globally-focused multi-state cannabis and hemp operator, today announced that it has signed definitive agreements to acquire the majority of the membership interests in Dalitso LLC (“Dalitso”).

Dalitso is currently one of only five applicants to receive conditional approval for a permit issued by the Virginia Board of Pharmacy to cultivate and process medical cannabis, and to dispense and deliver CBD oil and THC-A oil extracts in Virginia. Dalitso’s conditional approval is for the northeast region of Virginia, and the Company is developing a facility in Prince William County near the City of Manassas.

As we expand our geographic footprint, we are committed to making the highest quality investments and entering into the highest quality partnerships in the most ideal locations.

Jushi CEO and Chairman, Jim Cacioppo

We look forward to working closely with the Dalitso team to develop high quality medical cannabis products for the patients of Northern Virginia.

Farzana Kennedy, RPh, FACA, President of Dalitso commented, “We are excited to have found such a fantastic operational and financing partner in Jushi. Dalitso remains committed to providing the highest quality medical cannabis products and patient care in Virginia. Jushi’s experienced leadership team and world-class operational expertise perfectly positions Dalitso to deliver on that commitment and serve its patients through the Commonwealth’s medical cannabis program.”

With a population of 8.5 million according to the U.S. Census Bureau, Virginia expanded its medical cannabis program in 2018, enabling more residents than ever before to purchase medical cannabis in a variety of formulas. Dalitso has received conditional approval to operate within the Virginia Board of Pharmacy-designated Health Service Area II, which includes two of Virginia’s most densely populated counties, Fairfax and Prince William, with 2.4 million people or 28.2% of the state’s total population according to World Population Review.

The aggregate purchase price for the approximately 62% of the membership interests in Dalitso, is approximately US$16 million, subject to working capital and other customary adjustments. The purchase price is payable as follows:

  • US$7.8 million in cash;
  • US$4.2 million in Subordinate Voting Shares of the Company (“Shares”) issued at an indicative price of US$2.00 per Share;
  • approximately 1 million warrants to purchase Shares at a purchase price of US$3.00 per Share, expiring two years from issuance (together with the Shares, the “Equity Consideration”); and
  • US$4.0 million in promissory notes comprised of (i) US$2.7 million in 6% secured notes issued to the sellers maturing after 24 months and convertible at the option of the holders on or prior to the maturity date into Shares at a conversion price of US$6.00 per Share, and (ii) US$1.3 million in 9% unsecured notes issued to certain sellers maturing after 24 months.

The Equity Consideration shall be issued subject to certain escrow provisions. As part of the transactions, the Company will also lend up to US$15 million to Dalitso in a 9% secured note to support the continued buildout, equipment purchases and other working capital needs (“Working Capital Facility”). The Working Capital Facility shall mature 48-months from initial issuance and shall be paid down upon Dalitso’s generation of free cash flow. Closing of the transactions, subject to regulatory and other customary closing conditions, is scheduled to be completed in the third quarter of 2019.

About Jushi Holdings Inc.

We are a globally-focused cannabis and hemp company led by an industry leading management team. In the United States Jushi is focused on building a multi-state portfolio of branded cannabis and hemp-derived assets through opportunistic acquisitions, distressed work-outs and competitive applications. Jushi strives to maximize shareholder value while delivering high quality products across all levels of the cannabis and hemp ecosystem. For more information please visit www.jushico.com or our social media channels; Instagram, Facebook, Twitter and LinkedIn.

Original press release

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Published by NCV Newswire
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