- The Silver State Nevada partnership will establish C21’s competitive position in the Nevada market.
- C21’s investment and expansion of Silver State’s operations will generate new high-quality jobs and economic development within the State of Nevada.
C21 Investments, Inc., is pleased to announce a strategic expansion into the State of Nevada with one of the largest investment transactions into the USA cannabis industry by any Canadian public company to date. The acquisition (the “Acquisition”) and investment of expansion capital into Silver State Relief LLC and Silver State Cultivation LLC (Collectively “Silver State”) represents a major investment transaction valuing the acquired vertically integrated assets in excess of USD$50 million. This major acquisition of revenue generating assets of CDN$37.5 million trailing 12-month revenue (USD$28.5 million) is a new milestone in C21’s expansion into the USA cannabis industry. The Silver State transaction is the first transaction in a larger plan by C21 to significantly expand cultivation, processing, wholesale distribution of branded products and retail operations throughout the State of Nevada. The Silver State Nevada partnership will establish C21’s competitive position in the Nevada market. C21’s investment and expansion of Silver State’s operations will generate new high-quality jobs and economic development within the State of Nevada. www.cxxi.ca
President and CEO of C21 Robert Cheney stated: “Our entire C21 leadership is very excited to enter the Nevada market and looks forward to working with our new partners at Silver State. This represents our first acquisition of an established and profitable, vertically integrated business with strong potential for significant expansion on all levels, and is aligned with C21’s long term growth objectives.”
Silver State Acquisition Terms
For consideration to acquire Silver State Cultivation LLC and Silver State Relief LLC, USD$20 million cash payment paid upon closing with an additional 2,500,000 common shares to be granted upon closing.
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An interest bearing (3% per annum) convertible note with a principal value of USD$14 million with a term of 36-months from the date of closing, where the principal amount of the note is convertible into common shares of the Company at a price of USD$3.50 per common share of C21. The Company will have an option to acquire the 155,000 square-foot cultivation facility, including the 8,000-square foot retail dispensary building, located in Sparks, Nevada (the “Sparks”), for an acquisition price of USD$16 million or 4,571, 428 common shares at a deemed value of USD$3.50 per share.
The option to acquire the second dispensary real estate located in Fernley, Nevada (the “Fernley”) for an acquisition price of USD$750,000 for the existing building, land and fixtures, including construction adjustments, with a total estimated cost being approximately USD$2,175,000.
A commitment of USD$10 million allocated for the purpose of further expansion within the State of Nevada.
The closing of the Acquisition is conditional upon due diligence and subject to regulatory approval.
Regarding the new partnership, Sonny Newman, founder and sole owner of Silver State commented; “My team is pleased to become part of the C21 family. The Silver State brands and products are a strong compliment to C21’s existing business, and with the financial strength of C21 we look forward to expanding our reach within Nevada and nationwide.”
Date: July 23, 2018
Source: pharmiweb