Planet 13 Holdings Inc (CSE:PLTH, OTCQX:PLNHF). has entered into a definitive purchase agreement to acquire a cannabis license in Florida.
The company said its newly acquired subsidiary, which will be renamed Planet 13 Florida Inc., will purchase the license to operate as a Medical Marijuana Treatment Center.
The seller of the license, issued by the Florida Department of Health, is a subsidiary of Harvest Health & Recreation Inc. (CSE:HARV)
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As consideration for the license, Planet 13 said it will pay US$55 million in cash to the seller, with an initial deposit of US$2 million to be held in escrow by a third party agent upon execution of an escrow agreement as promptly as possible.
Planet 13 noted that Licensed Medical Marijuana Treatment Centers (MMTCs) are vertically integrated and the only businesses in Florida authorized to dispense medical marijuana cannabis to qualified patients and caregivers.
MMTCs are authorized to cultivate, process, transport, and dispense medical marijuana. As of August 26, 2021, there were 22 companies with MMTC licenses with 371 dispensing locations across Florida.
Planet 13 said license holders are not subject to restrictions on the number of dispensaries that may be opened or on the number or size of cultivation and processing facilities they may operate.
"Florida has long been one of our most coveted markets with over 20 million residents, 130 million annual visitors and incredible consumer demand already demonstrated in the medical program,” said Larry Scheffler, co-CEO of Planet 13, in a statement.
“It was important for us to enter the market prior to a transition to adult-use to put the pieces in place to capitalize on this market in both the short and long term. We are excited to introduce our best-in-class retail experience and portfolio of popular products to the Florida market and to continue to build the Planet 13 brand across the United States."
Planet 13 'well capitalized'
Bob Groesbeck, Planet 13’s other co-CEO, said the company is “well capitalized" to complete the initial buildout of its cultivation and retail plan, which includes a network of neighborhood stores in priority metro areas to support future SuperStores in Miami, Orlando, and other tourist destinations.
“We have a successful track record of completing large retail and cultivation buildouts on time and on budget. This expertise combined with our differentiated, experience-driven retail and diverse product portfolio gives us confidence moving into the Florida market," he added.
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