The Cannabist Company has agreed to sell its Virginia cannabis business to an entity affiliated with Millstreet Credit Fund LP for a total price of $130 million, subject to certain adjustments. This deal comes after a formal go-shop process in which the company explored alternative offers.
The Virginia business includes five operating retail stores, one additional store under development, and about 82,000 square feet of cultivation and production facilities in the Richmond area. The assets are owned through Green Leaf Medical of Virginia, LLC, a subsidiary of The Cannabist Company.
Under the agreement, the buyer, Parma Holdco LLC, will acquire all ownership interests in Green Leaf Virginia. Of the $130 million purchase price, $117.5 million will be paid in cash at closing. The remaining $12.5 million will be placed in escrow. Up to $1 million of that escrow will be released once final post-closing price adjustments are completed, and the rest will be held for nine months to cover any potential indemnification claims. The final purchase price may change based on factors such as cash levels, debt, working capital, and unpaid transaction expenses at closing.
Shortly after signing the agreement, the buyer will also place $23.7 million into an escrow account, which will be released either at closing or if the buyer breaches the agreement. The transaction still requires regulatory approvals and other standard closing conditions but does not need shareholder approval. It is expected to close in early 2026 or sooner.
The company plans to use part of the sale proceeds to repay some of its outstanding debt. A majority of the holders of the company's senior secured notes have already approved the transaction.
This deal replaces a prior agreement with Curaleaf, which was terminated after Cannabist received the superior offer from Millstreet's affiliate. As part of that termination, Cannabist will pay Curaleaf a $3.3 million break-up fee. The sale is part of a broader strategic review by the company's board to address ongoing financial and operational challenges.
For more information:
The Cannabist Company
www.cannabistcompany.com
