Schwazze(OTCQX: SHWZ) formerly known as Medicine Man Technologies is buying 14 Star Buds locations in the state of Colorado as part of the company’s pending acquisitions. The deal is valued at $118 million and the locations are said to have earned $50 in annual revenue.
Medicine Man had originally announced in September 2019 that it was buying five stores from Star Buds for just over $31 million in cash and stock. Schwazze was able to make the acquisition as a result of the passage of new legislation in Colorado, HB-1090. This allowed a publicly-traded company from outside the state to operate a plant touching business and to acquire a Colorado cannabis operator.
“Star Buds is a premier brand across the entire cannabis industry, and we are thrilled to bring the Colorado locations into the Schwazze family,” said Justin Dye, Chief Executive Officer of Schwazze. “Led by Brian Ruden, TJ Joudeh and their partners, Star Buds has built a respected, innovative, and trusted retail operations. I admire their commitment to high-quality products and paired with budtenders’ deep expertise and laser focus of taking care of their customers – it is a recipe for success. The addition of the Star Buds builds on our customer-centric focus and will significantly expand our retail operations footprint while also increasing return to shareholders.”
Star Buds was founded in 2013 and has 13 retail operations located throughout the Colorado front-range with four dispensaries in Denver, two dispensaries in Aurora, one dispensary in each of Commerce City, Westminster, Louisville, Longmont, Niwot, Pueblo and Pueblo West, and one cultivation in Denver.
The company said in a statement that the acquisition of the 14 Star Buds locations is represented by 13 different ownership groups and agreements. The Company has submitted a change of ownership applications with the Colorado Marijuana Enforcement Division for the 14 Star Buds locations and the transactions are expected to close in the third quarter of 2020.
“We are excited for the Colorado Star Buds locations to join the Schwazze portfolio,” said Brian Ruden, Star Buds owner, operator, and Schwazze Board Member. “The strategy Schwazze has outlined provides exciting opportunities for our employees, customers, and the industry. These transactions further Schwazze’s vision to create the most admired cannabis company in the world while remaining focused on customer experience, trusted branding, and strong profitability. We are proud of what Star Buds has built in Colorado and eagerly look forward to what the future holds with Schwazze.”
Star Buds operates 20 cannabis retail stores in Colorado, Oklahoma and Maryland. The company also produces brands including Kaviar concentrates and Stars Bars edibles.