C21 Investments Inc. (CSE: CXXI) (OTCQX: CXXIF) announced that its wholly-owned Nevada subsidiary, Silver State Relief, LLC would be buying Deep Roots Harvest, Inc. in a deal valued at $3.5 million. C21 also announced a non-brokered private placement of a principal amount of C$1,000 secured convertible debenture units of the company for aggregate gross proceeds of up to C$4 million.
Chief Executive Officer and President of the Company, Sonny Newman commented: “We are thrilled to announce the agreement with Deep Roots to acquire this dispensary which, upon completion of the acquisition, will allow us to expand our retail footprint in Nevada, a pivotal step in the Company’s growth strategy. We plan to integrate and rebrand this dispensary, purpose-built in 2021, under the Silver State Relief banner. With the dispensary’s desirable location in a high traffic, flourishing area of Southern Reno, we anticipate strong revenue growth from this acquisition, along with the added benefit of allowing us to expand the portion of our cultivation capacity sold through our retail channel.”
The Deep Roots’ assets include a 6,500-square-foot, purpose-built, operational retail cannabis dispensary located in Southern Reno, Nevada. The payment of $3.5 million consists of a cash payment of $100,000 at the time of the agreement and a cash payment of $3.4 million to be paid to Deep Roots at the closing.
In December C21 announced its third-quarter earnings with cash of $1.9 million at the end of that quarter. The company’s revenue had also decreased slightly due to a decline in wholesale business. Same-store sales increased for the company.
C21 owns Silver State Relief and Silver State Cultivation in Nevada. Its assets also include legacy Oregon brands Phantom Farms, Hood Oil and Eco Firma Farms. These brands produce and distribute a broad range of THC and CBD products from cannabis flowers, pre-rolls, cannabis oil, vaporizer cartridges, and edibles.
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