Cannabis Company Consolidates Arizona Cultivation Footprint After Doubling Down In Ohio

Vext Science, Inc. VEXT VEXTF has signed a definitive agreement to sell its cannabis cultivation facility located in Prescott Valley, Arizona, to affiliates of Elevate Cannabis Co. for $6.5 million in cash.

The Vancouver-based company expects the transaction to close by November 1, 2023.

Proceeds from the transaction are expected to be used to repay a portion of Vext's currently outstanding credit facilities, future acquisition opportunities and general corporate purposes, the company said on Wednesday.

Elevate Cannabis is a vertically integrated operator based out of Missouri with five dispensaries in their home state and has recently expanded into Arizona through a retail location.

"It has always been our stated objective to ensure that we match internal supply with internal demand in order to maximize margins and long-term returns," Eric Offenberger, CEO of Vext, said. "Following the opening of our modular cultivation facility in Eloy earlier this year, we can grow our cultivation capacity in lockstep with demand from our owned dispensaries as the market grows and as we see opportunities to expand our retail footprint in the state."

Offenberger added that the sale proceeds will further strengthen the company's balance sheet as it continues to focus on continued profitability and opportunities in Arizona and Ohio.

Earlier this week, Vext reached an agreement pending a regulatory review period on an asset purchase agreement and other definitive agreements with Big Perm's Dispensary Ohio, LLC and members thereof to acquire two cannabis dispensaries in Ohio for $9.4 million in cash. The company currently expects that the closing of the Ohio expansion transaction will take place in 2024.

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.

VEXTF Price Action

Vext Science's shares traded 1.6641% higher at $0.2016 per share at the market close on Tuesday afternoon.

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• Vext Science FY22 Revenue Declines 4.92% To $35.41M, What About Adjusted EBITDA?

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