Multistate marijuana operator Acreage Holdings said it has a definitive agreement to sell its medical cannabis operation in Florida to Red White & Bloom Brands for $60 million in cash and stock.
The deal reflects a further retrenchment by New York-based Acreage as it refocuses on a few core markets.
Toronto-based Red White & Bloom (RWB), on the other hand, is in a mode of rapid expansion in the U.S.
Acreage Florida has a vertical license to operate cultivation, processing and dispensaries in Florida.
The company has a 113,546-square-foot cultivation facility in Sanderson and eight store leases in Florida, according to an RWB news release.
But Acreage has had a tiny market presence in Florida, with only one dispensary open under The Botanist brand, according to state health department.
Recent weekly updates show that Acreage has been selling small amounts of smokable flower.
Acreage CEO Peter Caldini noted in a statement that “the sale of our Florida operations is a significant step in our previously announced operating strategy to focus on those core markets that we believe will accelerate our path to profitability and position us for significant long-term growth and cash generation.
“The cash proceeds will significantly bolster our balance sheet and position us to accelerate our cultivation expansion projects and open additional dispensaries to support our growth into key adult-use cannabis states such as Illinois and New Jersey.”
Last year, Acreage exited the medical marijuana markets in Iowa and North Dakota.
RWB is making an upfront cash payment of $5 million, plus an additional $20 million in cash, $7 million in stock and $28 million in promissory notes. The transaction is expected to close in the second quarter.
RWB said it is focusing its investments on major U.S. markets such as Arizona, California, Florida, Illinois, Michigan and Oklahoma.