Canada company to acquire Silver State Relief in $50 million deal
July 17, 2018
SPARKS, Nev. — C21 Investments, Inc. (CSE:CXXI), based out of Vancouver, Canada, has announced plans to purchase Silver State Relief LLC and Silver State Cultivation LLC, both based in Sparks.
The deal is worth more than $50 million, according to a business news release issued July 16 by C21 Investments.
The Canadian company billed the sale as "one of the largest investment transactions into the USA cannabis industry by any Canadian public company to date."
"Our entire C21 leadership is very excited to enter the Nevada market and looks forward to working with our new partners at Silver State," President and CEO of C21 Robert Cheney said in a statement. "This represents our first acquisition of an established and profitable, vertically integrated business with strong potential for significant expansion on all levels, and is aligned with C21's long term growth objectives."
According to C21 Investments, the move is the first transaction in a larger plan to "significantly expand cultivation, processing, wholesale distribution of branded products and retail operations throughout the State of Nevada."
According to the company, the plan includes an expansion of Silver State's operations in Sparks that "will generate new high-quality jobs and economic development within the State of Nevada."
Recommended Stories For You
"My team is pleased to become part of the C21 family," Sonny Newman, founder and owner of Silver State, said in a statement. "The Silver State brands and products are a strong compliment to C21's existing business, and with the financial strength of C21 we look forward to expanding our reach within Nevada and nationwide."
According to C21, the purchase includes the following terms:
• Makes a $20 million cash payment upon closing, plus grants 2.5 million shares of common stock when the deal closes.
• Gives Silver State a three-year, $14 million note (3 percent annual interest) at closing, in which the principal later could be converted into C21 common shares.
• Receives an option to acquire Silver State's 155,000-square-foot cultivation facility and 8,000-square-foot dispensary in Sparks, Nevada, for $16 million.
• May exercise an option to acquire a dispensary property scheduled to open later this year in Fernley, Nevada, for $2.2 million.
Further, C21 reportedly plans to spend at least $10 million for additional expansion in Nevada.
The deal's closing is "conditional upon due diligence and subject to regulatory approval," according to C21.
The July 16 news marks the second major move by C21 in what is expected to be a wave of Canadian acquisitions of U.S. cannabis companies, according to media reports.
On July 9, C21 announced plans to acquire Swell Companies Limited, described as "one of the most recognized and respected cannabis extraction and consumer packaged goods companies in Oregon."