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Jushi Holdings To Acquire Pennsylvania Medical Solutions

Jushi Holdings Inc., a cannabis and hemp operator, said Monday it has agreed to acquire the entire equity of Pennsylvania Medical Solutions LLC, a Pennsylvania grower-processor owned by Vireo Health International Inc.

Under the terms of the deal, Jushi will pay Vireo $16.3 million in cash, a $3.8 million seller note and assume a $17 million facility associated with a long-term lease obligation. The company said no equity will be issued in connection with the acquisition.

Pennsylvania Medical Solutions or PMS operates a 90,000 square-foot facility that will have about 45,000 square-feet of indoor cultivation space when construction is complete.

The property can accommodate an additional 25,000 square-feet of indoor cultivation, bringing the total to 70,000 square-feet of cultivation space. The company expects the facility to produce between 800 and 1,000 pounds of dried flower per month.

Jushi noted that the proposed acquisition will strengthen its position in Pennsylvania by adding equity ownership of PMS, to the collective rights of its other subsidiaries to operate up to fifteen dispensaries.

At closing, Jushi will have a purchase option to acquire all of the equity of Pennsylvania Dispensary Solutions, LLC or PADS, a Pennsylvania medical marijuana dispensary permittee in the Commonwealth's Northeast region. The option will expire eighteen months from closing of the deal.

Currently, PADS operate two medical marijuana dispensaries in Scranton and Bethlehem, with the right to operate one additional dispensary in the region. The closing of the deal is expected to occur by the end of August 2020.

Jim Cacioppo, chairman and chief executive officer of Jushi, said, "Upon completion Jushi will be able to provide high-quality, indoor flower and concentrates to our Pennsylvania patients who continue to experience constrained supply and high prices. Furthermore, we will be well-positioned to support an increase in demand and maintain the ability to further scale up the facility if required."

Jushi said it intends to fund the cash portion of the deal with the proceeds from the debt financing that the company announced along with the acquisition on Monday. The company has secured $15.25 million in debt financing to fund the purchase. The debt financing was led by insiders and existing shareholders.

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