The comapny is also trying to sell up to $10 million worth of shares.
Vext Science (CSE: VEXT) (OTCQX: VEXTF) announced plans Monday to purchase two Ohio-based cannabis dispensaries from Big Perm’s Dispensary Ohio. The acquisition, valued at approximately $9.8 million, will also include all relevant business assets and licenses from the dispensaries.
Vext, which has operations in Arizona and Ohio, also made a move to raise up to $10 million through the sale of company shares. It anticipates major stakeholders, including a notable institutional shareholder and key company executives, to account for more than 60% of the shares’ purchase.
Eric Offenberger, Vext’s CEO, hailed the acquisition as “a critical step toward achieving scale” in Ohio.
“The overall market environment, particularly from an equity perspective, remains challenging, but now is the right time for Vext to build a platform that will generate growing profitability and cash flow,” he said in a statement.
“Vext has a proven track record of operating profitably in the limited-license Arizona market, and we were early to understand that fully integrated operations and matching long-term cultivation with owned retail demand, is the route to capturing sustained margins and value.”
With the purchase and a prior acquisition of Appalachian Pharm Processing, the company inches closer to the Ohio state cap of five dispensary locations.
Under the terms of the agreement, Vext will pay the $9.8 million predominantly in cash, subject to certain conditions. The company also will shoulder around $3.4 million of construction expenses linked to the dispensaries.
If approved, the agreement is expected to be finalized by October’s end, with the deal’s closure anticipated in 2024.
Despite the state’s current sales slump amid its oversupply issue, companies have been quickly making moves to wedge a foothold in the limited medical market, after the campaign to go recreational surpassed the signature requirement needed to make the ballot.
In addition to that, traction on a federal banking bill and renewed hopes of changing the drug’s classification status have given a spark to the M&A environment.
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