Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF) is buying WSCC, Inc., also known as Sierra Well, adding two operational dispensaries and an active cultivation and production facility in Nevada along with two real estate properties in Carson City and Reno. The acquisition is a cash and stock deal valued at $29 million with $5.6 million in cash up front and the rest in stock. It is expected to close once approvals are received for the two medical cannabis cultivation licenses; two adult-use cultivation licenses; two medical cannabis dispensary licenses; two adult-use dispensary licenses; one medical production license; one adult-use product manufacturing license; and one adult-use distribution license.
“We’ve been operating successfully in Nevada since 2017 and have maintained focus on growing our presence in this highly attractive state. Following completion of this accretive transaction, Nevada will become a core market for us. We are pleased to strategically expand our distribution in Nevada while partnering with a like-minded ownership group that has built a profitable business through sound operational management,” said George Archos, Verano Founder, and CEO. “We look forward to expanding Verano’s retail presence into Northern Nevada and bringing our house of premium brands to more patients and consumers in a region that’s rife with natural beauty and draws significant tourism from around the country.”
Sierra Well was going to be bought by iAnthus in 2019 for $27.6 million. At that time Sierra Well had unaudited annual revenue of approximately $16 million with an EBITDA (non-IFRS) margin above 20% and positive net income. One year later, iAnthus said it had terminated the agreement as it was beginning to unravel.
The move is expected to strengthen the company’s distribution capability in Northern Nevada with the addition of an approximately 10,000 sq. ft. Reno cultivation and production facility, which will complement the active expansion at the Verano-affiliated cultivation facility in North Las Vegas. The company said that both dispensaries are located along busy retail corridors and just minutes from their respective city centers.
In addition, Verano said in a statement that it will broaden its Nevada supply chain while increasing the dispensary count between Verano and its affiliates to four active storefronts, with a fifth planned location to open in Las Vegas later this summer.