Vireo Growth Inc. Announces Merger with Cannabis Companies Across Several States

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A recent press release announced a merger between the independent cannabis company Proper Brands and multi-state parent company Vireo Growth Inc (1). The $397 million series of all-stock transactions will expand the operation reach of Vireo Growth, which is also acquiring three other companies in the merger, while Proper Brands will maintain its established identity and leadership in Missouri (2).

Vertically integrated, Missouri-based Proper Brands currently operates 11 dispensaries in the state, where both medical and recreational cannabis are legal (3). It cultivates over 100 strains of cannabis and also operates two manufacturing facilities. “We’re building a bigger family,” stated John Pennington, founder and CEO of Proper, in the press release. “This merger brings together the best local operators who share our values and passion. While this is a new chapter, our commitment to serving Missouri customers, employees and communities remains our top priority.”

The multi-brand company offers flower, pre-rolls, vaporizers, concentrate, edibles, and tinctures at its retail locations. “Proper remains unwavering in delivering what our passionate customers want: quality cannabis flower and extracts, as well as consistent, delicious edibles,” added Matt LaBrier, COO and co-founder of Proper, in the press release. “With this merger, we will have access to a larger pool of industry experts for best practices and joint resources to continue expanding Proper Brands’ portfolio of products for adult-use consumers and medical cannabis patients across Missouri.”

Founded in 2014, Vireo Growth currently operates 16 retail locations across the nation and on December 18 announced it had acquired four single state cannabis operators, including Proper Brands (2). The other brands in the merger are Deep Roots Harvest and WholesomeCo Cannabis, which expands Vireo’s operations to Nevada and Utah. Additionally, the company signed a binding Memorandum of Understanding to acquire The Flowery, located in Florida, bringing the total states in which it operates to seven, its dispensaries to 48, and its cultivation facilities to nine, covering 1,043,500 square feet of cultivation and manufacturing space. The merger also includes Arches, a cannabis delivery and analytics platform.

Vireo estimates 2024 proforma revenue of approximately $394 million and EBITDA of approximately $94 million.

Also announced in the news release, John Mazarakis was appointed CEO and Co-Executive Chairman, and Tyson Macdonald was appointed CFO. “I am thrilled to become Vireo’s Chief Executive Officer and to unveil a new strategy in the management and development of leading U.S. cannabis assets upon completion of the merger,” stated Mazarakis, in the news release. “We are proud to introduce a new platform for operators to continue growing their businesses independently, embracing a decentralized approach that empowers local knowledge and expertise to flourish. We also look forward to supporting this network of partners with complementary shared corporate services and the proprietary Arches technology platform which will enable their companies to adapt quickly to consumer behavior and capture incremental market share.”

References

1. Missouri-Based Proper Brands Agrees to Join Vireo Growth Inc. in $397 Million Merger Including Nevada, Utah Cannabis Brands. https://www.businesswire.com/news/home/20241219507289/en/Missouri-Based-Proper-Brands-Agrees-to-Join-Vireo-Growth-Inc.-in-397-Million-Merger-Including-Nevada-Utah-Cannabis-Brands Businesswire, 2024.
2. Vireo Growth Inc. Vireo Growth Inc. Announces $75 Million Financing and Acquisitions of Four Single State Operators https://vireohealth.com/vireo-growth-inc-announces-75-million-financing-acquisitions-four-single-state-operators?_ga=2.262664332.1212478262.1734658308-996120986.1734658308 2024.
3. Proper Brands. https://www.properbrands.com/retail (accessed Dec 19, 2024)