Verano Holdings Enters Into an Agreement for a Go-Public Transaction in Conjunction with AltMed Merger

The transaction will be effected by Verano participating in a reverse takeover of Majesta Minerals Inc.

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CHICAGO – December 15, 2020 – PRESS RELEASE – Verano Holdings, LLC , a multi-state cannabis operator, has announced it has entered into a definitive agreement to consummate a go-public transaction in Canada. The transaction will be effected by Verano participating in a reverse takeover (RTO) of Majesta Minerals Inc., a reporting issuer in Alberta, Canada, with the resulting Canadian reporting company being named “Verano Holdings Corp." The consummation of the transaction is subject to the approval of Majesta’s shareholders, antitrust and other regulatory approvals, court approval and other customary closing conditions. It is a condition of closing that the subordinate voting shares of the resulting issuer will be listed on the Canadian Securities Exchange (CSE).

The transaction is expected to close in the first quarter of 2021 and will include the previously announced merger with Alternative Medical Enterprises, LLC, Plants of Ruskin, LLC, RVC 360, LLC and affiliated companies (collectively, AltMed), fully-integrated medical marijuana companies operating in Arizona and Florida. The transaction is projected to be highly-accretive and establish the combined Verano and AltMed companies as one of the three largest multi-state operators (MSOs) in the U.S., and a clear leader in the U.S. cannabis market, which is estimated to be between $15.5 billion and $18.9 billion for 20202. The five-member resulting issuer’s Board of Directors is expected to consist of members nominated by Verano and AltMed, including three independent directors.

RTO

The RTO will be structured as a plan of arrangement pursuant to the laws of British Columbia. The plan of arrangement contemplates that Majesta’s existing shares will be consolidated and exchanged for subordinate voting shares of the resulting issuer with an expected aggregate value of US$1 million. Securityholders of Verano and AltMed will receive subordinate voting shares and proportionate voting shares of the resulting issuer which, in the aggregate and on an as-converted basis, will initially constitute approximately 77% and 23%, respectively, of the resulting issuer’s outstanding shares. These percentages are subject to dilution from expected share issuances arising from a concurrent offering, the closing of Verano’s pipeline transactions and certain contractual adjustments to the amount of the Merger consideration issuable to AltMed security holders. In addition to the share consideration issuable under the RTO, the resulting issuer will pay certain AltMed security holders a total of US$35 million in cash installments.

In connection with the RTO, a concurrent subscription receipt offering is being conducted which is expected to raise between US$50 million and US$100 million. The subscription receipts are anticipated to be priced at US$10 per subscription receipt and are based on a US$2.8 billion pre-money valuation of the resulting issuer.  Upon completion of the transaction, the subscription receipts will be exchanged for subordinate voting shares of the resulting issuer. Canaccord Genuity Corp and Beacon Securities Limited have been engaged as co-lead agents and co-bookrunners in the financing.

Resulting Issuer Footprint

Following the consummation of the RTO, the resulting issuer, through its operating subsidiaries, will operate in 14 U.S. States, with eight cultivation facilities and 48 active retail locations. Together Verano and AltMed remain devoted to the on-going development of communal wellness by providing responsible access to regulated cannabis products for the discerning high-end customer. The combined companies’ premium, comprehensive  offerings, encompassing both medically-focused and lifestyle products, will have four CPG brands: Verano, Avexia, Encore and MÜV and two retail store brands: Zen Leaf and MÜV.

“Our transformative combination with AltMed accelerates our vision to be one of the most innovative and profitable cannabis operators in the United States. We pride ourselves on our best-in-class core competencies of people, processes, research and products, with a strong commitment to providing a superior, customer-focused cannabis experience across our existing markets,” said George Archos, co-founder and CEO of Verano. “Becoming a public company will give us access to capital to execute our long-term strategy of expanding into limited-license, high-growth markets and scaling both our wholesale and retail operations into new and existing markets. Since the company’s inception, we have been disciplined cannabis operators and prudent stewards of capital with a consistent focus on profitable growth. We have a solid foundation and a thoughtful model for long-term success to deliver industry-leading EBITDA margins and sustainable value to our shareholders.”

“Both Verano and AltMed are uncompromisingly dedicated to superb cultivation and manufacturing processes, new product development and retail design, and we share a mutual commitment to delivering high-quality products with a superior customer experience to distinguish us in the marketplace,” said Michael Smullen, chairman, CEO and co-founder of Alternative Medical Enterprises, LLC. “We are both disciplined stewards of capital, run our businesses efficiently and are focused on delivering profitable growth.”

Transaction

Additional information regarding the transaction may be found in a press release issued by Majesta earlier today, and further details of the transaction and the business and operations of Verano (including applicable financial statements) will also be included in a listing statement to be filed with the CSE, and in other public filings anticipated to be made by Majesta.