Jushi's subsidiary Production Excellence has received local City of North Las Vegas authorization to enter the greater Las Vegas, Nevada market under a management services agreement with Franklin Bioscience Nevada. Pursuant to the transaction, Jushi has also completed the purchase of the real estate associated with Franklin Bioscience Nevada's facility in North Las Vegas, Nevada.
Production Excellence has also entered into a purchase agreement to acquire 100% equity ownership of Franklin Bioscience Nevada, subject to state and local approvals. An application for change of ownership has already been submitted with the State of Nevada Department of Taxation and is pending. As consideration for the acquisition, Production Excellence will purchase Franklin Bioscience NV's licenses and related real estate for an aggregate purchase price of US$9.0 million in a combination of US$6.4 million in cash and US$2.6 million in promissory notes.
Franklin Bioscience Nevada holds medical and adult-use cannabis cultivation, processing and distribution licenses issued by the Nevada Department of Taxation and currently operates cultivation, production and distribution facilities in North Las Vegas, Nevada. It is expected that closing of the equity acquisition will occur during the second half of 2019, subject to receipt of applicable regulatory approvals.
The facilities acquired include two adjacent buildings with cultivation, manufacturing and distribution capabilities. The buildings may be combined and expanded further. Additionally, the Nevada Department of Agriculture issued Franklin Bioscience Nevada a Hemp Handler license. The award-winning operations team at The Clinic, Jushi's recently closed acquisition, will leverage its expertise with assisting Franklin Bioscience Nevada in building similar facilities to lead the expansion in Nevada.
Jim Cacioppo, Jushi CEO and Chairman, commented, "Nevada, particularly the greater Las Vegas region, is an important market for us. As one of the largest adult-use markets in the U.S., Nevada's high tourist volume represents an opportunity for us to showcase our operational expertise and partner with other premier national brands as well as provide an ideal, central location for wholesale distribution. In Nevada we endeavor to be vertically integrated, therefore it was critical we acquired strong production, cultivation and manufacturing capabilities as we prepare our retail strategy in this market."
Mr. Cacioppo continued, "The Nevada Department of Agriculture Hemp Handler license will allow us to receive and process industrial hemp in accordance with Nevada regulations. This license is complimentary to the hemp CBD processing license we already have in place in New York."
David Taeb, General Manager of Franklin Bioscience Nevada, stated, "We are pleased to partner with the team at Jushi to expand our offerings while continuing to support our current customers with the products they already know and love. We look forward to working closely with the Jushi team and together taking part in the rapid growth trajectory being experienced in Nevada."