The Greenrose Holding Company (OTCQX:GNRS) Inc, which plans to become a multistate cultivator and producer of cannabis products, revealed that it closed its previously announced acquisition of the assets of Arizona-based True Harvest LLC.
Under the terms of the deal, Greenrose paid a consideration of $57.6 million at the close, consisting of $12.5 million in cash, $23 million in the form of a convertible note, $4.6 million in assumed debt, and $17.5 million in shares of the company’s stock.
“Contingent upon True Harvest achieving a certain price point per pound of cannabis flower relative to total flower production within 36 months of the closing of the transaction, Greenrose will pay additional consideration of up to $35 million in the form of an earnout, payable in shares,” said Greenrose.
“Completing our asset purchase of True Harvest expands Greenrose’s footprint into the Southwest and demonstrates the continued execution of our growth strategy,” Greenrose CEO Mickey Harley said in a statement.
“We look forward to working with True Harvest’s talented cultivation team to continue building our company around high-quality flower. With our strong cultivation footprint in Arizona and Connecticut, we believe our platform is well-positioned to capture the growth opportunities offered by these new and emerging recreational markets,” he added.
Harley said the company is “proud" of the progress it has made and will execute on its strategic objectives in 2022.
Amityville, New York-based Greenrose completed its business combination with the acquisition of Connecticut-based Theraplant LLC on November 26, 2021. The firm has revised its 2022 outlook for True Harvest and Theraplant to reflect an expected fourth quarter 2022 start for recreational cannabis sales in Connecticut.
“Combined, True Harvest and Theraplant are expected to generate between $120 million and $140 million in full year 2022 revenue, 2022 net income of between $8 million and $14 million, and 2022 adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) between the range of $75 million and $85 million,” said the company.
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