Verano To Go Public In Canada Via RTO, Launches A Subscription Receipt Offering

Cannabis company Verano Holdings LLC will go public in Canada through a reverse takeover of Majesta Minerals Inc.

Chicago based multi-state cannabis operator said it has signed a definitive agreement to effect a business combination and the finalization of the previously announced merger by Verano with Alternative Medical Enterprises LLC, Plants of Ruskin LLC, and affiliated companies, which are medical-marijuana companies operating in Arizona and Florida.

The combined company will remain as Verano Holdings Corp. It's expected to be one of the three biggest multi-state operators in the U.S.

The transaction is dependent on various conditions, such as the authorization of Majesta’s shareholders, other regulatory approvals, while it is also a condition of closing that the subordinate voting shares of the resulting company will be listed on the Canadian Securities Exchange.

Verano projects for the transactions to close during the first quarter of 2021.

Per the arrangement, Majesta’s shares will be replaced for subordinate voting shares of the resulting company with a projected total value of $1 million.

Raising Funds To Support Going Public

What’s more, in relation to the reverse takeover, Verano has launched a subscription receipt offering with plans to raise between $50 million and $100 million. One subscription receipt will be priced at $10, based on the $2.8 billion pre-money valuation of the Verano Holdings Crop.

After the transaction is finalized the subscription receipts will be exchanged for subordinate voting shares of the new company.

Verano Holdings Crop. will run its business across 14 U.S. states, owning 48 operating retail stores, eight cultivation facilities, four CPG brands: Verano, Encore, MÜV, Avexia, 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,” George Archos, Co-Founder and CEO of Verano said in a statement.

“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.”