Cannabis Company Doubles Down On Ohio, Acquires Two Shops In Major Deal As Legalization Vote Looms

Vext Science, Inc. VEXT VEXTF said on Monday that it has reached an agreement pending a regulatory review period on an asset purchase agreement, together with other definitive agreements with Big Perm's Dispensary Ohio, LLC and members thereof, to acquire two cannabis dispensaries in Ohio.

What Happened

Under the terms of the definitive agreements, previously announced earlier this month, Vext agreed to pay $9.4 million in cash in return.

Subject to regulatory approval by the Ohio Board of Pharmacy, Vext will fund approximately $3.4 million of construction costs related to the dispensaries, which are payable upon closing the deal.

After regulatory approval,  Vext will provide certain administrative, operational and support services to Big Perm in compliance with Ohio's rules and regulations concerning medical marijuana and has agreed to loan up to $3 million to Big Perm for capital expenditures and working capital needs associated with the dispensaries.

To support its expansion efforts, Vext Science announced a non-brokered private placement of common shares of the company to raise $10 million earlier this month.

Why It Matters

The acquisition of two dispensaries and the previously announced Appalachian Pharm acquisition will give Vext a more significant presence in Ohio.

With the impending recreational legalization vote in Ohio's general election in November 2023, Vext is positioning itself for growth in this promising market.

Pro forma for these transactions, Vext will operate a Tier I cultivation facility, a manufacturing facility, and four retail dispensaries in the state, per an earlier press release.

What's Next

The Ohio expansion transaction remains subject to regulatory approvals and other customary conditions precedent.

The company currently expects that the closing of the Ohio expansion transaction will take place in 2024.

VEXTF Price Action

Vext Science's shares traded 3.1538% lower at $0.1889 per share at the market close on Friday afternoon.

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