Planet 13 Holdings has entered into a definitive license purchase agreement with a subsidiary of Harvest Health & Recreation to purchase a license to operate as a Medical Marijuana Treatment Center, (the "License") issued by the Florida Department of Health to the Seller, and no other assets or liabilities, from the Seller for US$55 million in cash.
Licensed Medical Marijuana Treatment Centers ("MMTCs") are vertically integrated and the only businesses in Florida authorized to dispense medical cannabis cannabis to qualified patients and caregivers. MMTCs are authorized to cultivate, process, transport and dispense medical cannabis. As of August 26, 2021, there were 22 companies with MMTC licenses with 371 dispensing locations across Florida. License holders are not subject to restrictions on the number of dispensaries that may be opened or on the number or size of cultivation and processing facilities they may operate.
"Florida has long been one of our most coveted markets with over 20 million residents, 130 million annual visitors and incredible consumer demand already demonstrated in the medical program. It was important for us to enter the market prior to a transition to adult-use to put the pieces in place to capitalize on this market in both the short and long term," said Larry Scheffler, Co-CEO of Planet 13. "We are excited to introduce our best-in-class retail experience and portfolio of popular products to the Florida market and to continue to build the Planet 13 brand across the United States."
"After a lot of planning on how we wanted to approach this market, now is the time for action. We are well capitalized to complete the initial buildout of our cultivation and retail plan which includes a network of neighborhood stores in priority metro areas to support future SuperStores in Miami, Orlando, and other tourist destinations," said Bob Groesbeck, Co-CEO. "We have a successful track record of completing large retail and cultivation buildouts on time and on budget. This expertise combined with our differentiated, experience-driven retail and diverse product portfolio gives us confidence moving into the Florida market."
As consideration for the license, the company will pay US$55 million in cash to the seller, with an initial deposit therefrom of US$2 million to be delivered by the company and held in escrow by a third party escrow agent upon execution of an escrow agreement as promptly as possible after the date hereof. The transaction is subject to certain closing conditions including the successful close of the Trulieve Cannabis Corp./Harvest arrangement transaction, the Florida Department of Health's Office of Medical Marijuana Use ("OMMU") approval for Planet 13 Florida to acquire the license and other customary closing conditions. If the foregoing regulatory approval is not obtained, the company and seller will have the right to terminate the agreement.
Beacon Securities Limited is acting as financial advisor to the company in connection with the License acquisition.