Schwazze Announces Transformational Capital Increase, New Mexico Entry, and Business Update

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The Notes will bear interest at 13% per annum (9% payable in cash and 4% accruing on the principal amount), will have a term of 5 years and will be secured by a first lien on unencumbered assets and a second lien on encumbered assets. assets of the Company and its subsidiaries. The note will be convertible into common shares of the Company at any time at a conversion price to be fixed on issue equal to 117.5% of the lesser of the volume-weighted average of the closing prices of the common shares of the Company. during (i) five trading days before the date on which the Company undertakes to issue the notes, (ii) 30 trading days before the date of issue of the notes and (iii) five trading days before the date issuance of tickets. The Company will have the right to redeem the Notes at any time, subject to a prepayment penalty. The Company expects to issue and sell the tickets within a week.

The foregoing is not a complete description of all the terms of the Notes and the financing and additional information will be available in an 8-K file with the Securities and Exchange Commission.

New Mexico
Schwazze is also pleased to announce that it has signed the final documents to acquire substantially all of the operating assets of Reynold Green Leaf & Associates, LLC, and the equity of Elemental Kitchen & Laboratories, LLC. As part of the operation, the Company will also have the right to purchase or acquire cannabis licenses held by Medzen Services, Inc., (“Medzen”) and R. Greenleaf Organics, Inc. (“RGO”), non-profit organizations who hold medical cannabis licenses in New Mexico (the assets and licenses described herein are collectively referred to as “Greenleaf”). The total consideration for the acquisition will be $ 42 million (subject to potential working capital adjustments) with a possible price supplement based on performance. The counterpart will consist of $ 25 million in cash payable at closing and $ 17 million in a 3-year seller’s note at 5% interest.

Greenleaf is a licensed medical cannabis supplier with ten dispensaries, four grow facilities – three in operation and one in development – and a manufacturing site. Dispensaries are located at Albuquerque, Santa Fe, Roswell, Las Cruces, Subsidies and Las Vegas, New Mexico. Greenleaf’s approximately 70,000 square feet of cultivation as well as 6,000 square feet of manufacturing space are located in Albuquerque. The state of New Mexico currently permits medical cannabis and has approved sales of recreational cannabis for adults, which by law begin no later than April 2022.

The acquisition is expected to be finalized during the next quarter, subject to customary closing conditions and commitments for this type of transaction, including obtaining applicable approvals from the New Mexico Regulation and Licensing Department (RLD). With this acquisition, Schwazze will become a multi-state operator (“MSO”) with a total of 32 announced and acquired dispensaries, seven cultivation facilities and two manufacturing plants located either Colorado Where New Mexico.

We appreciate the strong support of our group of institutional investors who believe in our differentiated strategy and our ability to execute. We believe this capital will help Schwazze meet its growth target of doubling its pro forma revenue by the end of the first quarter of 2022. The company will continue to aggressively pursue its expansion and operating plans in Colorado the future, as evidenced by the recently announced acquisitions of Emerald fields and Smoking Gun dispensaries. Our planned expansion in New Mexico is a logical step in building a solid base in a region that will leverage the synergies of our operating strategy and our talents. Entry into New Mexico will elevate Schwazze to the MSO category, but with a differentiated regional focus. We believe our playbook will have the same success in New Mexico, which is expected to expand rapidly in 2022 and 2023 as the market opens up for adult consumption. We welcome the members of the Greenleaf team to Schwazze and are excited about our future together “, declared Justin dye, CEO and President.

Company update
Since april 2020, Schwazze announced and / or acquired a total of 32 cannabis dispensaries, including the ten Greenleaf dispensaries in New Mexico. The Company also announced and / or acquired in 2021 a total of seven cultivation facilities, three in Colorado – SCG Holding LLC, Brow 2 LLC and Star Buds – and four licensed by Medzen and RGO in New Mexico. The acquisition of Greenleaf will add a New Mexico the manufacturing asset, Elemental Kitchen & Laboratories, LLC, at the company’s manufacturing facility, Purplebee’s at Colorado. See Figure 1, depicting the existing or pending Schwazze dispensary assets.

In May 2021, Schwazze announced its BioSciences division and in August 2021 it launched home delivery services in Colorado.

Advisers
Perella Weinberg Partners LP is acting as financial advisor to Schwazze and The Benchmark Company, LLC is acting as sole placement agent for the offering. Schwazze was represented by Brownstein Hyatt Farber Schreck, LLP on legal matters relating to the offering and sale of tickets and was represented by Dentons on legal matters relating to the New Mexico transaction.

About Schwazze
Schwazze (OTCQX: SHWZ) is building a leading, vertically integrated regional cannabis company with assets in Colorado and New Mexico and will continue to expand its operating system to other states where it can develop a position of differentiated regional leadership. Schwazze is the parent company of a portfolio of leading cannabis companies and brands from seed to sale. The Company is committed to unlocking the full potential of the cannabis plant to improve the human condition. Schwazze is rooted in a high performance culture that combines customer-centric thinking and data science to test, measure and drive decisions and results. The company’s management team has extensive retail, wholesale and consumer branding expertise in Fortune 500 companies as well as the cannabis industry. Schwazze is passionate about making a difference in our communities, promoting diversity and inclusion, and doing our part to incorporate climate-conscious best practices. Medicine Man Technologies, Inc. was the old trade name for Schwazze. The legal entity continues to be known as Medicine Man Technologies, Inc.

Schwazze takes its name from the technique of pruning a cannabis plant to improve the structure of the plant and promote healthy growth.

Forward-looking statements
This press release contains “forward-looking statements”. Such statements may be preceded by the words “plan”, “will”, “may”, “predict” or similar words. Forward-looking statements are not guarantees of future events or performance, are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond the control of the Company and cannot be predicted or quantified. Therefore, actual events and results may differ materially from those expressed or implied by these forward-looking statements. These risks and uncertainties include, without limitation, the risks and uncertainties associated with (i) our inability to manufacture our product and product candidates on a commercial scale by ourselves or in collaboration with third parties; (ii) difficulties in obtaining financing on commercially reasonable terms; (iii) changes in the size and nature of our competitors; (iv) the loss of one or more key executives or scientists; (v) difficulties in obtaining regulatory approval to market our products and product candidates; (vi) our ability to successfully execute our growth strategy in Colorado and outside the State, (vii) our ability to complete the acquisition described in this press release or to identify and complete future acquisitions that meet our criteria, (viii) our ability to successfully integrate companies acquired and to derive synergies from it, (ix) the ongoing COVID-19 pandemic, * the timing and extent of government stimulus programs, (xi) uncertainty in the application of federal, state and local laws to our business, and any changes to those laws, and * our ability to meet the closing conditions for private discovery described in this press release. More detailed information about the company and the risk factors that may affect the realization of forward-looking statements are set out in the documents filed by the company with the Securities and Exchange Commission (SEC), including the company’s annual report on the form 10-K and its Quarterly Report Reports on Form 10-Q. Investors and security holders are encouraged to read these documents free of charge on the SEC’s website at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise, except as required by law.

SOURCE Medicine Man Technologies, Inc.


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