Michigan-based SKYMINT, is buying 3Fifteen Cannabis and also closing its $70 million Senior Secured Term Loan from Tropics LP, an affiliate of SunStream Bancorp Inc., a joint venture initiative sponsored by Sundial Growers Inc. (Nasdaq: SNDL), and its $8 million equity investment from Merida Capital Holdings. The acquisition will bring Skymint’s workforce to 730 employees and a combined retail portfolio of 27 locations totaling 101,000 square feet, with an additional 18+in the 2021-2022 pipeline.
The combined company will now have a dominant market share in four key Michigan regions: Grand Rapids, (4 locations), Greater Lansing (4 locations), Detroit / Metro Detroit (5 locations), and Ann Arbor (2 locations). In addition, it will have two indoor cultivation facilities totaling 77,000 square feet with a third indoor cultivation facility – totaling 184,000 square feet – due to come online next year and a 1,000–acre sustainable, sun-grown farm (Michigan’s largest outdoor cannabis farm).
“Skymint was founded on a mission to become a leader in the cannabis industry while leveraging our leadership position as a positive catalyst for change,” said Skymint CEO and co-founder Jeff Radway. “With this acquisition of 3Fifteen Cannabis, we have a monumental opportunity and responsibility to truly shape the market for the better, bring more jobs to our state, provide Michiganders increased access to clean, handcrafted, premium products and experiences at the best value, and continue our commitment to uplift the communities we are fortunate to serve.”
The company said in a statement that with the acquisition of 3Fifteen Cannabis, it now has the capability to serve nearly 90%of adult Michigan residents in a market valued at $3.2B that has embraced the freedom to consume cannabis recreationally since 2019. Three additional Skymint stores are planned to open in 2021, and 15 more locations are set for 2022.
“Merida has already invested deeply in Michigan through 3Fifteen, due to the attractive population dynamics. Skymint’s leading vertical position augments 3Fifteen’s leading retail presence,” explained Mitch Baruchowitz, CEO of Merida Capital Holdings and will be joining Skymint’s board of directors upon closing of the transaction.
The announcement comes on the heels of Michigan’s record-breaking July 2021 sales. According to an August 2021 report from industry analyst Headset, Michigan celebrated a 56% year-over-year increase in July 2021 sales totaling $171M, with adult recreational products comprising the largest share of $128M; and in May 2021, Michigan’s cannabis sales were less than $8.5M short of surpassing Colorado’s, which presently holds the No. 2 state ranking for national cannabis sales.
“We couldn’t be more excited to have a partner like Skymint to execute our shared vision for aggressive expansion,” said Tommy Nafso, President and General Counsel of 3Fifteen. “Skymint’s operational efficiencies and meticulous focus on quality, combined with best-in-state cultivation operations and innovative approach to retail, creates the perfect operating environment for continued success.”