Jushi U.S. Subsidiary Becomes the Owner of Two Cannabis Dispensaries in Illinois
Both medical dispensaries are eligible to seek approval to become adult-use dispensaries. The Sauget dispensary has received approval for adult-use.
Each of the two dispensaries is eligible to seek approval to open an additional retail location and Jushi plans to have all four dispensaries operational in 2020
BOCA RATON, Fla., Jan. 30, 2020 /CNW/ -- Jushi Holdings Inc. ("Jushi" or the "Company") (CSE: JUSH) (OTCQX: JUSHF), a globally-focused, multi-state cannabis and hemp operator, today announced that its wholly owned subsidiary, Jushi Inc, has become the majority owner of two Illinois medical cannabis dispensaries – one in Sauget, IL and one in Normal, IL – by being transferred a majority stake in their holding company. The Sauget dispensary has been approved for adult-use. The Normal dispensary is eligible to seek approval from the Illinois Department of Financial and Professional Regulation ("IDFPR") to also become an adult-use dispensary. Each dispensary is eligible to seek approval from the IDFPR to open a second retail location.
Each of the 55 existing medical dispensaries in Illinois has the option of adding a second retail location and adding adult-use to the dispensaries. Jushi intends to exercise these options with respect to the two existing dispensaries and have four dispensaries open and operating in 2020 as adult-use storefronts, subject to regulatory approvals. The two existing dispensary locations currently operate as The Green Solution ("TGS") but will transition to BEYOND/HELLO branding during the year, and are located at 2021 Goose Lake Road, Sauget, IL 62206 and 501 West Northtown Road, Normal, IL 61761.
Sauget is part of the "Metro East" area of Illinois (Eastern St. Louis Suburbs in Illinois) with a population of 702,597 according to the U.S. Census. The region is considered the second largest urban area of Illinois and St. Clair County, where Sauget is located, has a population of 261,059 according to U.S. Census. The area is known for its high traffic due to its proximity to restaurants, bars and nightlife. The current dispensary location is on the same commerce park as GCS Ballpark, home to the Gateway Grizzlies, a professional baseball team in the Frontier League.
Normal is adjacent to Bloomington and part of the Bloomington-Normal metropolitan area in central Illinois comprising a population of 170,000 according to the U.S. Census. Bloomington and Normal are commonly referenced together as "twin cities" in the state. The area is one of the major economic centers in central Illinois with State Farm and Country Financial both based in Bloomington. With the existing location and a second site in the area, Jushi will control two-thirds of the total dispensaries allowed in the Bloomington-Normal metropolitan area.
"Illinois is an attractive, competitive and limited license market that turned to adult-use at the onset of the new year," said Jim Cacioppo, Chairman and CEO of Jushi. "We are poised to solidify ourselves in the Midwest with this initial acquisition of our first two dispensaries in the area. The stores' prime locations and thriving communities make it the ideal locations to bolster the Company's retail portfolio, continuing to support our growth strategy of expanding Jushi's footprint in limited license states and municipalities. We look forward to providing further announcements as we continue to strategically establish our footprint throughout the state."
More specifically, Jushi Inc will be the transferee of an approximately 75% interest in the units of TGS Illinois Holdings LLC ("TGSIH"). TGSIH, through its operating subsidiary, TGS Illinois LLC, owns and operates the two cannabis dispensaries. Both retail locations have been operating for several years under the pre-existing Illinois medical cannabis program and are eligible to seek approval to also become adult-use dispensaries. Illinois's adult-use legalization went into effect January 1, 2020. The Sauget dispensary was recently approved by the IDFPR to become an adult-use dispensary.
The TGSIH transfer is a part of a series of transactions under a settlement agreement between Jushi Inc and its respective affiliates, and The Green Solution and its respective affiliates and their owners ("TGS"). The transactions include: (1) Jushi Inc returning its 51% majority stake in TGS National Holdings, LLC ("TGS National") to TGS and terminating the purchase agreement with TGS National which includes certain restrictive covenants, employment agreements and exclusive intellectual property licenses in Jushi's favor; (2) the transfer to Jushi Inc of the approximately 75% interest in the TGSIH units; (3) Jushi Inc's assumption and/or payoff of approximately US$12 million in debt including interest and expenses relating to the debt; (4) the transfer to Jushi Inc of 416,060 common shares of Organigram Holdings Inc., and 4,750,000 common shares of Jushi Holdings Inc. and warrants to purchase 2,375,000 common shares of Jushi Holdings, Inc. at an exercise price equal to US$2.00 per common share of which these shares and warrants will be cancelled; (5) the payment to Jushi Inc of approximately US$480,000; and (6) the transfer to a third party designee of Jushi Inc 200,000 common shares of Jushi Inc and warrants to purchase 200,000 common shares of Jushi Inc at an exercise price equal to US$1.00 per common share pursuant to a confidential settlement agreement.
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 workouts 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.
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SOURCE Jushi Holdings Inc.
Released January 30, 2020