Adam Jackson
Denver-based Medicine Man Technologies Inc., which operates as Schwazze (OTCQX: SHWZ) (NEO: SHWZ), has signed definitive documents to acquire a batch of cannabis assets in New Mexico.
The acquisition will allow Schwazze to manage Everest Apothecary, a non-profit corporation operating in the state. The proposed transaction includes 14 retail dispensaries, a cultivation facility, and a manufacturing plant.
Upon completion of the acquisition, Schwazze will have a total of 32 dispensaries in New Mexico, with over 450 employees.
The purchase price for the proposed acquisition is $38 million. Schwazze will pay the sum using a combination of cash, a four-year seller note, and company common stock. The acquisition is expected to close in the second quarter of 2023, subject to approval from the New Mexico Regulation and Licensing Department.
“This planned acquisition shows our commitment to the Company’s super-regional cannabis growth strategy to go deep in select markets,” Schwazze president Nirup Krishnamurthy said in a statement.
“The Everest brand is a perfect complement to our existing retail brand in New Mexico. Each serves a unique demographic, and we will continue to operate both retail banners in the state.”
Krishnamurthy added that by utilizing Schwazze’s operating playbook, the company intends to support the Everest team and its customers under the new deal.
Once commonly known as Medicine Man, Schwazze’s aggressive expansion strategy began in April 2020, after the company went public and has since snapped up retail competitors around Colorado and New Mexico, as well as eight cultivation facilities and three manufacturing plants.
The company also recently announced its biosciences division and commenced home delivery services in Colorado. It plans to continue pursuing acquisitions, partnerships, and strategic investments to expand its retail presence and market share.
Schwazze posted an annual $18.5 million loss by the end of 2022, in part due to its acquisitions and entry in New Mexico. Still, the company posted solid increases in revenue, profit, retail sales, and cash flow for both the full year and for the fourth quarter.
