Ontario-based Scythian Biosciences (OTC: SCCYF) is selling its Florida operation called 3 Boys Farms and using that money to become a multi-state operator.
In July, Scythian sold its Caribbean assets to Aphria (OTC: APHQF) in a deal valued at $193 million. Scythian spent $136 million to purchase CannCure Investments Inc, which is an Ontario-based company that is itself in the process of acquiring an interest in the Florida-based 3 Boys Farms, along with The Healthcare Organization. That deal was supposed to close on October 15.
Scythian is selling its 100% interest in 3 Boys Farms, which is a strictly Florida operation to Verano in exchange for $100 million of Class B units in Verano. In exchange, Scythian will receive a substantial stake in Verano which will open the company up to key markets, including Illinois, Maryland, Michigan, Nevada, Ohio, Florida, and Puerto Rico, with additional states to be added in 2019. All part of the company’s expansion strategy. Only four states are operational at this time.
“Scythian delivers on its promise to investors by identifying and investing in the most impressive emerging cannabis company in the U.S. marketplace, Verano,” said Scythian Chief Executive Officer Brady Cobb. “Verano brings strong, efficient and expansive operations to numerous U.S. markets. Its customer-centric dispensary experience that is filled with its diverse and high-quality products (150 SKU’s), cutting-edge cultivation facilities, innovative processing techniques, and seasoned executive/management team will fast-track its standing to the top of the U.S. cannabis industry.”
Scythian is investing $88 million in Class B units of Verano as part of a larger brokered private placement of securities of Verano to accredited investors for an aggregate amount of $100 million. Clarus Securities Inc. acted as the sole agent in the financing. The deal is expected to close on or about October 26, 2018. According to the company statement, Scythian also entered into a membership interest contribution agreement between Scythian and Verano, under which Scythian will acquire the remaining 40% of 3 Boys Farms and, when completed, sell and convey its entire interest in 3 Boys Farms to Verano in exchange for $100 million of Verano class B membership units.
Verano Holdings is a national, vertically integrated operator of licensed cannabis cultivation, manufacturing, and retail facilities. Verano develops and produces a suite of limited edition, fashion-forward cannabis products, which offer medicinal therapies and inspirational product options. It designs, builds and operates the Zen Leaf™ branded dispensary.
- Illinois: one cultivation and production facility and three dispensaries;
- Florida: one cultivation and production facility and up to 30 dispensary facilities under current law;
- Maryland: one cultivation and production facility and two dispensaries;
- Nevada: one cultivation and production facility and one dispensary;
- Michigan: licenses under development;
- Ohio: licenses under development;
- Puerto Rico: licenses under development
“This transformative investment will fast-track our long-term goal to dominate the most important growth industry in the United States,” stated George Archos, Verano’s Chairman, and CEO. “Even with our accelerated growth, we will remain focused on our core values of operational excellence with an unwavering commitment to producing safe, quality cannabis products for a consistent experience.”