In the news release, Green Growth Brands Expands its Multi-State Operations into Arizona, issued 31-Jan-2019 by Green Growth Brands over PR Newswire, we are advised by the company that the ninth paragraph, first sentence, should read “the Company issued 1,741,244 common shares of GGB (Common Shares) at a price of CAD $3.39 per Common Share” rather than “the Company issued 1,480,057 common shares of GGB (Common Shares) at a price of CAD$2.88 per Common Share” as originally issued inadvertently. The complete, corrected release follows:
Green Growth Brands Expands its Multi-State Operations into Arizona
Acquisition of a vertically-integrated business adds a third U.S. state to Green Growth Brands’ operations and is the next step in its accelerated plan to become a leading American MSO
COLUMBUS, OH, Jan. 31, 2019/PRNewswire/ – Green Growth Brands, Inc. (CSE: GGB) (OTCQB: GGBXF) (GGB or the Company) announced that yesterday, January 30, it executed an arm’s length definitive agreement to acquire control of ZLJT LLC & Arizona Natural Pain Solutions Inc, collectively referred to as “Desert Rose”. Desert Rose holds a license for a vertically-integrated operation in Arizona, including retail, cultivation & infusion (kitchen). As consideration for the membership interests, GGB will pay an aggregate purchase price of USD$12,350,000 (CAN$16,292,120) in cash.
“We were very impressed with the quality of the operations held by Arizona Natural Pain Solutions,” said Green Growth Brands CEO Peter Horvath. “At Desert Rose, the team is dedicated to providing their customers with medical marijuana products that are pure, safe, and efficient while striving to keep their costs as affordable as possible. This strategy fits perfectly with our plans to grow the world’s premier cannabis retailing business.”
Desert Rose, located on the corner of 7th Ave and Happy Valley Road, close to the Norterra shopping center, was founded in August 2016 and has grown to serve nearly 400 patients per day. Desert Rose specializes in top-tier flower, vape pens, concentrates, edibles and tinctures. Desert Rose has over 237 reviews on Google and a 4.7/5 star rating and offers a loyalty program where customers earn back 1% of their purchases to be spent in the dispensary.
“The retail operations at Desert Rose fits our stated strategy of favoring large sales volume with high-productivity assets,” added Horvath. “Our vision of Green Growth Brands is to be a multi-state operator with stores averaging USD$15 million to USD$20 million in annual sales, driven by per square foot sales in excess of USD$10,000. This is what our first assets in Nevada and this store in Arizona have achieved.”
The state of Arizona currently restricts cannabis consumption for medical use but appears to be moving towards legalizing recreational use. According to the Arizona Department of Health Services, marijuana sales in the state reached almost 122,000 pounds in 2018, a 41% increase over 2017, with over 186,000 registered medical marijuana patients as of December 2018.
Completion of the acquisition is expected to occur in February 2019 and remains subject to regulatory approval, customary conditions of closing and the satisfactory completion of due diligence by the Company.
The Desert Rose transaction further expands Green Growth Brands position as a multi-state operator (MSO), with Arizona representing the third U.S. state in which the Company will have a marijuana-related operations. The Company intends to become one of America’s leading MSOs, having previously announced in December 2018 its entry into the Massachusetts cannabis market via the execution of a definitive agreement to acquire 100% of the membership interests of Just Healthy LLC (“Just Healthy”), and later that same month the expansion of operations and the awarding of additional licenses in Nevada.
In addition, the Company is pleased to announce the completion, on January 30, 2019, of its previously announced acquisition of Just Healthy LLC (Just Healthy). Just Healthy holds provisional certificates of registration for a registered medical marijuana dispensary, cultivation, and processing site in Northampton, Massachusetts.
Pursuant to the terms of the Just Healthy membership interest purchase agreement, the Company issued 1,741,244 common shares of GGB (Common Shares) at a price of CAD $3.39 per Common Share (representing a 15% discount to the closing market price of the Common Shares on the Canadian Securities Exchange on December 11, 2018 (being the date immediately preceding the date of the news release announcing this transaction)). GGB has also assumed and satisfied USD$455,000 (CAD$569,933) of Just Healthy corporate debt.
In connection with the acquisition of Just Healthy, the Company has elected to exercise an option to purchase land in the Northampton, Massachusetts area for a total purchase price of USD$700,000(CAD$923,440). The land is the future site of the cultivation facility. The land portion of the transaction is expected to close on January 31, 2019 and remains subject to customary closing conditions.
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