Schwazze Closes New Mexico Acquisition In A $42M Cash And Debt Deal

Schwazze SHWZ announced that it has closed the transaction to acquire substantially all the operating assets of Reynold Greenleaf & Associates, LLC, and the equity of Elemental Kitchen & Laboratories, LLC.

As part of the transaction, the company will also have a right to purchase or acquire cannabis licenses held by Medzen Services, Inc.,  and R. Greenleaf Organics, Inc. , not-for-profit organizations that hold medical cannabis licenses in New Mexico (the assets and licenses described herein are referenced collectively as "Greenleaf").

Total consideration for the acquisition was $42 million with a potential performance based earnout. The consideration consists of $25 million in cash paid at closing and $17 million in a 3-year seller note at 5% interest.

Greenleaf is a licensed medical cannabis provider with ten dispensaries, four cultivation facilities – three operating and one in development – and one manufacturing location. The dispensaries are located in Albuquerque, Santa Fe, Roswell, Las Cruces, Grants and Las Vegas, New Mexico. Greenleaf's approximately 70,000 square feet of cultivation as well as 6,000 square feet of manufacturing space are located in Albuquerque.

With this acquisition, Schwazze is now a multi-state operator with a total of 32 announced and acquired dispensaries, seven cultivation facilities and two manufacturing operations located in either Colorado or New Mexico.

"With our regional expansion into New Mexico now complete, we have firmly graduated to the MSO category but with a differentiated regional focus which we and our stakeholders believe will be successful as we continue to position the Company for rapid expansion as the market opens for adult use consumption. We welcome the Greenleaf team to Schwazze, particularly Willie Ford who joins us in an advisory capacity, and are excited about our future together,"  Justin Dye, CEO & Chairman stated.

Willie Ford, managing director and founder of Greenleaf added; "We are very excited to work with Schwazze given the depth of the team, their strong experience in retail and cannabis and their commitment to regional growth. This will be critical for us as New Mexico makes the move into legalization of cannabis for recreational use in April of this year."