Vext Science (CSE: VEXT) (OTCQX: VEXTF) announced Tuesday that it plans to sell its cultivation facility in Prescott Valley, Arizona, to Elevate Cannabis Co. for $6.5 million.
Vext, which also has operations in Ohio, expects to finalize the deal by Nov. 1. The company has been on an M&A spree in Ohio as that state tees up for a potential adult-use market, and news to divest in Arizona isn’t surprising after flat sales and a concentrated brand ecosystem continue to plague the Copper State.
“It has always been our stated objective to ensure that we match internal supply with internal demand in order to maximize margins and long-term returns,” Vext CEO Eric Offenberger said in a statement.
“Following the opening of our modular cultivation facility in Eloy (Arizona) earlier this year, we have the ability to grow our cultivation capacity in lockstep with demand from our owned dispensaries, as the market grows and as we see opportunities to expand our retail footprint in the state. The proceeds of the sale will further strengthen our balance sheet as we focus on continued profitability and opportunities in Arizona, as well as our growing footprint in Ohio.”
According to the deal terms, Elevate Cannabis will pay the full amount in cash upon the sale’s close. Vext plans to allocate the funds toward paying off some of its debt, potential acquisitions, and other corporate needs.
Missouri-based Elevate Cannabis, which manages five dispensaries in its home state, recently ventured into Arizona’s market.