TORONTO, Aug. 12, 2019 (GLOBE NEWSWIRE) -- PRESS RELEASE -- Nabis Holdings Inc., a Canadian investment company with specialty investments in assets across multiple divisions of the cannabis sector, has announced that it has entered into a Definitive Agreement for the acquisition of 100 percent of the membership units of a licensed medical marijuana business in the state of Arizona.
The asset, licensed under the provisions of the Arizona Medical Marijuana Act, operates a dispensary in Phoenix, Ariz. The dispensary in Phoenix has been operating since 2015 with proprietary branded products and wholesale operations, including an established distribution network serving more than 50 percent of the dispensaries in Arizona.
The audited sales for 2017 and 2018 were USD $7.4 million and $8.7 million respectively. 2019 unaudited revenue is on pace for sales of USD $9 million. The dispensary specializes in top-tier flower, vape pens, concentrates, edibles, tinctures and CBD products.
“We’re excited to sign a Definitive Agreement for this strategic acquisition of vertically integrated assets in the state of Arizona. Entering Arizona is a key milestone in our business as we leverage our early-mover advantage to capitalize on one of the strongest limited-license, medical cannabis markets in the U.S.,” said Shay Shnet, CEO and director of Nabis.
The dispensary will be rebranded as Nabis after the transaction closes. This transaction also includes a cannabis-infused edibles brand that is available in over 65 licensed retailers across the state. The company has a pipeline of new product innovations that it will continue to roll out through this distribution network once the transaction closes. The dispensary is licensed to operate in the city of Phoenix (Maricopa County), which serves more than 132,000 unique patients, per the Arizona Department of Health Services.
“Expanding the Nabis footprint, bringing industry expertise and high-quality products to Arizona is a top priority for Nabis. We are confident that, given the revenue generation history of the business’ existing assets, combined with ongoing initiatives to further expand production and distribution capabilities, Nabis will be well positioned to capitalize on the dramatic growth of the cannabis market in Arizona. We remain focused on identifying opportunities to supplement our operations in the state of Arizona, as well as other attractive limited-license states across the country,” concluded Shnet.
After passing the Arizona Medical Marijuana Act, which took effect April 14, 2011, Arizona became the fourteenth state to adopt a medical marijuana law. As of June 2019, the state had 210,430 registered card holders eligible to consume medical grade cannabis products, according to the Arizona Department of Health Services’ June 2019 Monthly Report.
Nabis will acquire 100 percent of the membership units of the asset for total consideration of USD $15 million (CAD $19.65 million) composed of USD $7 million in cash, $2 million of Nabis’ common stock, and $6 million deferred for 12 months. The Nabis common stock will be determined by the 10 day trailing volume weighted average price upon transaction closing.
Arizona continues to be a priority market for Nabis with large scale growth projections next year. This transaction will expand Nabis’ position on operating licensing rights to include a total of 10 locations for retail, cultivation and processing facilities in four states across the U.S.
The transaction is subject to customary closing and acquisition conditions, including obtaining all necessary approvals.