Jushi Holdings Inc. Announces Closing Of Deal To Acquire 100% Interest In Pennsylvania Medical Marijuana Dispensary Operators
- Acquisition of membership interests in four retail dispensary businesses with ability to open up to 12 locations, establishing major footprint in a limited license state
- Debut of Jushi's first operational cannabis dispensaries with two Beyond/Hello dispensaries located in Philadelphia and Bristol, PA
BOCA RATON, Fla., July 11, 2019 /CNW/ -- Jushi Holdings Inc. ("Jushi" or the "Company")(NEO: JUSH.B), a globally-focused, multi-state cannabis and hemp operator, today announced the closing of the Company's previously announced acquisition of all of the membership interests in Franklin Bioscience – Penn LLC and its subsidiaries Franklin Bioscience – NE, LLC, Franklin Bioscience – SE, LLC and Franklin Bioscience – SW, LLC (collectively, the "Purchased Entities"), which together hold one Phase I and three Phase II dispensary permits issued by the Pennsylvania Department of Health's Medical Marijuana Program ("Program") allowing for 12 medical marijuana dispensaries in the Commonwealth of Pennsylvania.
"Our investment in Pennsylvania has quickly cemented Jushi as a leader in this northeastern limited license state. These acquisitions include two stores that are already operational with the opportunity for ten more," Jim Cacioppo, Chairman and CEO of Jushi. "Beyond/Hello currently has two fantastic locations with an established brand in Pennsylvania and a loyal patient base. We are immediately evaluating the locations for our remaining 10 stores within the highly desirable regions of Philadelphia, Pittsburgh and Scranton and we look forward to obtaining the Program's approval for their openings. Jushi is excited to close this transaction as it is a big achievement for our shareholders as we scale our retail footprint, specifically creating a significant retail market share in Pennsylvania."
The acquisition includes 100% ownership of the membership interests in four medical marijuana dispensary entities, with each of the entities being allowed to open three separate locations. The existing retail dispensary brand, "Beyond/Hello", has two operational dispensaries in Philadelphia and Bristol, PA. They are strategically located near major interstate highways and key traffic areas in order to best serve the patients in these areas including Rittenhouse Square, the Reading Terminal Market and leading medical centers.
The retail locations throughout Pennsylvania that are covered by the permits are:
- Southeast Region (Philadelphia area): allowing for six stores including the two existing and operational marijuana dispensaries
- Northeast Region (Scranton area): allowing for three stores
- Southwest Region (Pittsburgh area): allowing for three stores
Blythe Huestis, President of Beyond/Hello, commented, "Franklin Bioscience – Penn LLC had a wide range of companies interested in partnering with us and Jushi's management team was the one we found most capable of meeting the growing needs of the Commonwealth's medical marijuana patients. We look forward to Jushi assisting us with providing high-quality products to our patients and allowing for a better and healthier quality of life."
The regional locations of the planned facilities are among the most densely populated areas of Pennsylvania. Three of the four permits allow for facilities in major metropolitan markets, Philadelphia and Pittsburgh, which together account for approximately 15% of the Pennsylvania's total population. Pennsylvania is the fifth largest state in the country with approximately 13 million residents, operating with a high barrier of entry and limited number of medical marijuana permits. Pennsylvania's medical cannabis market is expected to become one of the largest markets in the U.S. In the first year that the program was operational, 2018, the Commonwealth generated over US$132 million in total sales, and is estimated to increase to over US$360 million by 2022 according to Arcview Market Research. Pennsylvania has a robust list of 21 conditions including opioid use disorder and severe chronic pain. For more information on the Pennsylvania medical marijuana program please visit https://www.health.pa.gov.
As previously announced, the aggregate purchase price payable by Jushi for the Purchased Entities is approximately US$63 million, subject to working capital and other adjustments, and is payable:
- As to approximately US$27.11 million, in cash;
- As to approximately US$27.50 million, by way of the issuance of certain 10% secured notes to the sellers of the Purchased Entities, due in installments at various dates between September 30, 2019 and March 9, 2021 and US$10 million of which is convertible at the option of the holders on or prior to September 30, 2019 into Subordinate Voting Shares of the Corporation (the "Shares") at a conversion price of US$3.30 per Share; and
- As for the balance, by the issuance of approximately 3.38 million Shares to the sellers of the Purchased Companies, of which 1.5 million Shares are to be issued subject to certain escrow provisions.
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.
Forward-Looking Information and Statements
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SOURCE Jushi Holdings Inc.
Released July 11, 2019