Florida-based Jushi Holdings has entered into an acquisition deal with Dalitso LLC, one of the five conditionally licensed cannabis businesses in Virginia. The $16-million transaction includes a mix of cash, stock and convertible promissory notes.
Dalitso earned one of the state’s vertically integrated licenses to produce, process and sell CBD oil and THC-A oil extracts. The five licenses were distributed by geography; Dalitso’s operations will be based near Fairfax.
"We are excited to have found such a fantastic operational and financing partner in Jushi,” Farzana Kennedy, president of Dalitso, said. “Dalitso remains committed to providing the highest quality medical cannabis products and patient care in Virginia. Jushi's experienced leadership team and world-class operational expertise perfectly positions Dalitso to deliver on that commitment and serve its patients through the Commonwealth's medical cannabis program."
The Jushi team praised Kennedy’s experience as the pharmacist-in-charge at Dalitso, noting that she’ll “oversee its production of high-quality medical cannabis products.”
“The Dalitso team played, and will continue to play, a key role in the process,” Jim Cacioppo, Jushi CEO and chairman, told Cannabis Business Times. “We are working closely with the existing Dalitso team to support their planned buildout and supply expertise with our operating team from The Clinic, but we will be reliant on our close partnership with the Virginia team in place.”
The move in Virginia is emblematic of how Jushi has grown its cannabis and hemp portfolio to date. The company’s acquisitions include a San Diego dispensary; several Pennsylvania dispensaries; and intellectual property assets from The Clinic, The Lab and The Bank. Jushi owns SW Retail Stores LLC, which does business as Mend; the first Mend store opened in Amherst, N.Y., earlier this year.
“Jushi has strategically targeted cash-generating assets in adult-use markets and limited license medical markets that are seeming to be on the path to going adult-use,” Cacioppo said. “Because of our unique executive team experience—over hundred years of collective M&A and investing experience in highly regulated industries—we focus on deal structuring, risk management, optimal capital allocation, and corporate governance coming from highly compliant and regulated industries.”
As evidenced by moves in California, Pennsylvania, Colorado and Virginia, all in relatively rapid succession, Jushi has big plans in the U.S. cannabis and hemp-derived CBD space.
“Virginia has been very strategic with its limited license process,” Cacioppo said. “Holding one of only five licenses in a state of 8.5 million people, in which officials are expanding its medical cannabis program, will allow Dalitso to play a key role as the market develops, which is great to be a part of.”