Article by Robert Channick, Chicago Tribune
Verano Holdings announced plans Tuesday to go public on the Canadian Securities Exchange through a complex reverse merger that values the Chicago-based marijuana company at nearly $3 billion.
The reverse takeover of publicly traded Majesta Minerals, a dormant Alberta uranium mining company, also would include a previously announced merger with a Florida-based cannabis company, Alternative Medical Enterprises.
Both transactions are expected to close in the first quarter of 2021, pending approval from Majesta shareholders and Canadian regulators.
“Our transformative combination with AltMed accelerates our vision to be one of the most innovative and profitable cannabis operators in the United States,” George Archos, co-founder and CEO of Verano, said in a news release.
As part of the deal, Verano is looking to raise between $50 million and $100 million through a subscription offering that values the combined companies at US$2.8 billion.
Verano was started as an Illinois medical marijuana grow operation in 2014 by Archos, a Chicago restaurateur. The company has evolved into a multistate powerhouse, with a 12-state footprint and 19 retail locations under the ZenLeaf banner.
Verano has three Illinois dispensaries, in Aurora, St. Charles and Charleston, in east-central Illinois, where a store opened last week. The company plans to open ZenLeaf dispensaries in Evanston and Naperville in the coming months.
Last month, Verano announced it was acquiring Alternative Medical Enterprises, which does business in Arizona and Florida. The combined companies will operate in 14 states, with eight cultivation facilities and 48 retail locations under the ZenLeaf and MUV brands.
Verano initially will receive 77% and AltMed 23% of the converted shares in the new company.
The deal would significantly increase Verano’s valuation. In March, Phoenix-based Harvest Health & Recreation called off its $850 million purchase of Verano.
If completed, Verano would join Chicago-based marijuana competitors Green Thumb and Cresco Labs as multibillion-dollar, publicly traded companies on the Canadian Securities Exchange. Companies are unable to trade on U.S. exchanges because weed is a still a federally controlled substance. But the political winds are beginning to shift.
In November, four more states approved recreational marijuana use, while six Chicago suburbs joined a growing list of Illinois municipalities allowing recreational cannabis dispensaries. Weed is legal in 35 states, including 15 that allow it for recreational use.