SOL Global Investments Corp. (CSE: SOL) (OTCQB: SOLCF), the owner of 3 Boys Farms, which holds one of Florida’s original 14 operating and vertically integrated medical marijuana treatment center licenses, has entered into a binding letter of intent with cannabis-focused private equity firm Merida Capital Partners to acquire Merida’s Michigan subsidiary, MCP Wellness, Inc. in a deal valued at $150 million.
The company said that MCP Wellness was a special-purpose vehicle (SPV) created to invest in Michigan cannabis operations and currently holds the rights to acquire two Michigan cultivation licenses, a processing license, and 3 fully licensed cannabis provisioning centers in Michigan with a fourth provisioning center scheduled to open in Ann Arbor in May. MCP Wellness also has plans to open an additional nine municipally-approved provisioning centers by August 2019. Assuming MCP Wellness’ expansion plans are completed as scheduled, SOL Global and Merida expect Michigan gross revenue from the acquired business to generate in excess of $61 million in the calendar year 2019 and more than $121 million in 2020.
According to the company statement, the deal will consist of $35 million in cash and $115 million in equity consideration in CannCure, resulting in Merida owning approximately 42% of CannCure. With regards to the cash, $9 million will be sourced from cash on hand and $24 million will come from a private placement financing of CannCure equity and/or debt.
Michigan’s medical cannabis business is projected at nearly $900 million for 2019, according to New Frontier Data.
SOL Global is also finalizing negotiations to acquire an industry leading California cultivator and processor with superior genetics and a chain of prime retail dispensaries in California, and at the conclusion of that transaction, SOL Global intends to pursue a “going public transaction” of the MSO.
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