Nabis Holdings has entered into a Definitive Agreement for the acquisition of 100% of the membership units of a licensed medical marijuana business in the state of Arizona (“The Asset”).
The Asset, licensed under the provisions of the Arizona Medical Marijuana Act, operates a dispensary in Phoenix, Arizona. The dispensary in Phoenix has been operating since 2015 with proprietary branded products and wholesale operations, including an established distribution network serving more than 50% of the dispensaries in Arizona.
The audited sales for 2017 and 2018 were USD $7.4 million and $8.7 million respectively. 2019 unaudited revenue is on pace for sales of USD $9 million. The dispensary specializes in top-tier flower, vape pens, concentrates, edibles, tinctures and CBD products.
The dispensary will be rebranded as Nabis after the transaction closes. This transaction also includes a cannabis-infused edibles brand that is available in over 65 licensed retailers across the state. The Company has a pipeline of new product innovations that it will continue to roll out through this distribution network once the transaction closes. The dispensary is licensed to operate in the city of Phoenix (Maricopa County), which serves more than 132,000 unique patients, per the Arizona Department of Health Services.
After passing the Arizona Medical Marijuana Act, which took effect April 14, 2011, Arizona became the fourteenth state to adopt a medical marijuana law. As of June 2019, the state had 210,430 registered card holders eligible to consume medical-grade cannabis products, according to the Arizona Department of Health Services’ June 2019 Monthly Report.
Nabis will acquire 100% of the membership units of the Asset for total consideration of USD $15 million (CAD $19.65 million) composed of USD $7 million in cash, $2 million of Nabis’ common stock, and $6 million deferred for 12 months.
Arizona continues to be a priority market for Nabis with large scale growth projections next year. This transaction will expand Nabis’ position on operating licensing rights to include a total of 10 locations for retail, cultivation and processing facilities in 4 states across the U.S.
The transaction is subject to customary closing and acquisition conditions, including obtaining all necessary approvals.
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