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SOL Agrees to Buy Merida’s Michigan Cannabis Business

ME Staff

SOL Global Investments (CSE: SOL) (OTCQB: SOLCF) (Frankfurt: 9SB) is acquiring MCP Wellness, a subsidiary of Merida Capital Partners.

SOL signed a binding letter of intent with cannabis-focused private equity firm Merida to acquire its Michigan cannabis business for US$150 million.

MCP Focuses on Michigan Cannabis Market

MCP Wellness, a special-purpose vehicle created to invest in Michigan cannabis operations, currently holds the rights to acquire two Michigan cultivation licenses, a processing license, and three fully-licensed cannabis provisioning centers in Michigan with a fourth provisioning center scheduled to open in Ann Arbor in May.

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The company also has plans to open an additional nine municipally-approved provisioning centers by August 2019.

Assuming MCP’s expansion plans are completed as scheduled, SOL and Merida expect Michigan gross revenue from the acquired business to generate in excess of US$61 million in calendar-year 2019 and more than US$121 million in 2020.

Acquisition

The acquisition, which is subject to the negotiation and execution of a definitive purchase agreement and regulatory approval for the transfer of licenses within Michigan, is expected to close in May 2019 and will not dilute SOL’s shareholders.

Following the closing of the acquisition, SOL intends to combine the acquired Michigan business into CannCure Investments to form a new multi-state operator (MSO).

Under the terms of the LOI, the purchase price will be satisfied by way of US$35 million in cash and US$115 million in equity consideration in CannCure, resulting in Merida owning approximately 42% of CannCure.

Merida, which recently launched its third fund, will contribute both operational talent and oversight into the combined entity. As part of the acquisition, certain key executives of the Michigan operation will join the MSO and serve on the leadership team with an emphasis on retail operations.

“This acquisition will help ensure that SOL Global, through the MSO, will be able to execute on its visionary vertically integrated cultivation and retail strategies in the United States’ most promising cannabis markets,” SOL CEO Brady Cobb stated.

In addition, SOL and Merida are also in active negotiations on acquisitions for the MSO in additional states. Specifically, SOL is finalizing negotiations to acquire a California cultivator and processor with superior genetics and a chain of prime retail dispensaries in California.

The post SOL Agrees to Buy Merida’s Michigan Cannabis Business appeared first on Market Exclusive.