Schwazze (OTCQX:SHWZ), formerly known as Medicine Man Technologies, announced today that it has closed the transaction to acquire the assets of Southern Colorado Growers (SCG) in Huerfano County, Colorado. The transaction was previously announced last month on June 1, 2021.
“Our team is excited to add SCG, a premier cannabis cultivator, to our growing platform. This acquisition will provide premium quality flower to our 19 Star Buds Colorado locations. In addition, the SCG garden will significantly increase our capability to produce a substantial amount of biomass for our Purplebee’s distillate manufacturing operation, which will benefit the entire cannabis industry throughout the state. The addition of SCG to our portfolio is expected to provide a positive margin impact for Schwazze,” said Justin Dye, Schwazze’s CEO.
Schwazze is committed to growing a leading vertically integrated cannabis holding company with a portfolio of licensed brands spanning across a variety of sectors including cultivations, extraction, infused-product manufacturing, dispensary operations and consulting. Last year, on April 20, 2020, Schwazze completed its acquisition of Mesa Organics and its Purplebee’s business, Colorado’s largest supplier of wholesale distillate for the consumer packaged goods (CPG) market. More recently, on March 3, 2021, Schwazze completed the acquisition of all Star Buds retail outlets in Colorado, expanding the Company’s retail presence in the state to a total of 17 retail locations.
With this in mind, Schwazze’s latest acquisition is expected to accelerate the growth of both its Purplebee’s and Star Buds’ operations. According to the terms of the acquisition, Schwazze will obtain 34 acres of land with outdoor and indoor cultivation capacity, as well as greenhouse and hoop house cultivations facilities and equipment. This purchase represents the Company’s first major move into cultivations, which is expected to provide high-end, premium cannabis directly to Schwazze’s Star Buds dispensaries. Additionally, the acquired facilities will enable the Company to produce significant biomass for its Purplebee’s extractions and manufacturing facility.
Currently, CGC produces premium flower with approximately 30 strains and has won multiple Connoisseur Cup awards for select strains in 2020. Looking forward, Schwazze has major expansion plans for SGC, which includes the buildout of cultivation capacity over the next four quarters. Schwazze has now completed the acquisition of SGC for a total consideration of $11.3 million, paid as $5.9 million in cash and $5.4 million in Schwazze common stock upon closing.
Schwazze’s share price opened at $2.17, down from a previous close of $2.28. The Company’s shares are down -1.31% and are currently trading at $2.25 as of 1:01PM ET.