Schwazze Cannabis Co. Closes $11M Acquisition Of Southern Colorado Growers, Makes 'First Major Move Into Cultivation'

Cannabis company Schwazze SHWZ, previously known as Medicine Man Technologies Inc., purchased Southern Colorado Growers in Huerfano County, Colorado for $11.3 million, including $5.9 million in cash and $5.4 million in stock.

What Happened

The company closed the previously announced acquisition that boosted its footprint in Colorado by 34 acres of land, including outdoor cultivation capacity and indoor, greenhouse and hoop house cultivation facilities and equipment.

The price tag included $6.8 million the Denver company paid for the business and $4.5 million it paid in the exchange for the real estate and farm assets.

Why It Matters

In addition to being the "first major move into cultivation," the purchase of SCG significantly expands Schwazze's presence in Colorado.

The newly acquired cultivation capacity is expected to supply the company's Star Buds dispensaries with premium cannabis as well as provide significant production of biomass for its PurpleBee's extraction and manufacturing facility.

"This acquisition will provide premium quality flower to our 19 Star Buds Colorado locations," Justin Dye, Schwazze's CEO said Thursday. The company has been acquiring Star Buds stores across the state after announcing its plans to acquire 13 Star Buds stores and one cultivation center last year.

What's Next

The company intends to significantly expand SCG's capacities by building out its cultivation capacity in the coming four quarters.

SCG is a producer of premium cannabis flower with roughly 30 strains.

"The SCG garden will significantly increase our capability to produce a substantial amount of biomass for our Purplebee's distillate manufacturing operation, which will benefit the entire cannabis industry throughout the state," Dye explained.

Photo: Courtesy of Schwazze