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Verano Holdings to go public at near $3b valuation

CHICAGO, Dec. 15, 2020 (GLOBE NEWSWIRE) — Verano Holdings, LLC (“Verano” or the “Company”), a leading multi-state cannabis operator, today announced it has entered into a definitive agreement to consummate a go-public transaction in Canada (the “Transaction”). The Transaction will be effected by Verano participating in a reverse takeover (the “RTO”) of Majesta Minerals Inc. (“Majesta”), a reporting issuer in Alberta, Canada, with the resulting Canadian reporting company being named “Verano Holdings Corp.” (the “Resulting Issuer”). The consummation of the Transaction is subject to the approval of Majesta’s shareholders, antitrust and other regulatory approvals, court approval and other customary closing conditions. It is a condition of closing that the subordinate voting shares of the Resulting Issuer will be listed on the Canadian Securities Exchange (the “CSE”).

The Transaction is expected to close in the first quarter of 2021 and will include the previously announced merger (the “Merger”) with Alternative Medical Enterprises, LLC, Plants of Ruskin, LLC, RVC 360, LLC and affiliated companies (collectively, “AltMed”), fully-integrated medical marijuana companies operating in Arizona and Florida. The Transaction is projected to be highly-accretive and establish the combined Verano and AltMed companies as one of the three largest multi-state operators1 (“MSOs”) in the U.S., and a clear leader in the U.S. cannabis market, which is estimated to be between $15.5 billion and $18.9 billion for 20202. The five-member Resulting Issuer’s Board of Directors is expected to consist of members nominated by Verano and AltMed, including three independent directors.

RTO

The RTO will be structured as a plan of arrangement pursuant to the laws of British Columbia. The plan of arrangement contemplates that Majesta’s existing shares will be consolidated and exchanged for subordinate voting shares of the Resulting Issuer with an expected aggregate value of US$1 million. Securityholders of Verano and AltMed will receive subordinate voting shares and proportionate voting shares of the Resulting Issuer which, in the aggregate and on an as-converted basis, will initially constitute approximately 77% and 23%, respectively, of the Resulting Issuer’s outstanding shares. These percentages are subject to dilution from expected share issuances arising from a concurrent offering, the closing of Verano’s pipeline transactions, and certain contractual adjustments to the amount of the Merger consideration issuable to AltMed security holders. In addition to the share consideration issuable under the RTO, the Resulting Issuer will pay certain AltMed security holders a total of US$35 million in cash installments.

In connection with the RTO, a concurrent subscription receipt offering is being conducted which is expected to raise between US$50 million and US$100 million. The subscription receipts are anticipated to be priced at US$10 per subscription receipt and are based on a US$2.8 billion pre-money valuation of the Resulting Issuer. Upon completion of the Transaction, the subscription receipts will be exchanged for subordinate voting shares of the Resulting Issuer. Canaccord Genuity Corp and Beacon Securities Limited have been engaged as co-lead agents and co-bookrunners in the financing.

Resulting Issuer Footprint

Following the consummation of the RTO, the Resulting Issuer, through its operating subsidiaries, will operate in 14 U.S. States, with eight cultivation facilities and 48 active retail locations. Together Verano and AltMed remain devoted to the on-going development of communal wellness by providing responsible access to regulated cannabis products for the discerning high-end customer. The combined companies’ premium, comprehensive offerings, encompassing both medically-focused and lifestyle products, will have four CPG brands: Verano, Avexia, Encore and MÜV and two retail store brands: Zen Leaf and MÜV.

“Our transformative combination with AltMed accelerates our vision to be one of the most innovative and profitable cannabis operators in the United States. We pride ourselves on our best-in-class core competencies of people, processes, research and products, with a strong commitment to providing a superior, customer-focused cannabis experience across our existing markets,” said George Archos, Co-Founder and CEO of Verano. “Becoming a public company will give us access to capital to execute our long-term strategy of expanding into limited-license, high-growth markets and scaling both our wholesale and retail operations into new and existing markets. Since the Company’s inception, we have been disciplined cannabis operators and prudent stewards of capital with a consistent focus on profitable growth. We have a solid foundation and a thoughtful model for long-term success to deliver industry-leading EBITDA margins and sustainable value to our shareholders.”

“Both Verano and AltMed are uncompromisingly dedicated to superb cultivation and manufacturing processes, new product development and retail design, and we share a mutual commitment to delivering high-quality products with a superior customer experience to distinguish us in the marketplace,” said Michael Smullen, Chairman, CEO and Co-founder of Alternative Medical Enterprises, LLC. “We are both disciplined stewards of capital, run our businesses efficiently and are focused on delivering profitable growth.”

1 Based on 2021 internal projections compared to current FactSet 2021 consensus estimates for revenue and EBITDA
Source: 2020 Marijuana Business Factbook

Transaction

Additional information regarding the Transaction may be found in a press release issued by Majesta earlier today, and further details of the Transaction and the business and operations of Verano (including applicable financial statements) will also be included in a listing statement to be filed with the CSE, and in other public filings anticipated to be made by Majesta.

About Verano

Verano is a leading vertically-integrated multi-state cannabis operator in the U.S. An operator, manager, and licensor of licensed cannabis cultivation, processing and retail facilities, Verano is devoted to the ongoing development of communal wellness by providing responsible access to regulated cannabis products for the discerning high-end customer. Active in 12 U.S. States, with 19 active retail locations3 and approximately 440,000 square feet across its cultivation facilities, Verano produces a full suite of premium, artisanal cannabis products sold under its trusted portfolio of consumer brands: Encore, Avexia™ and Verano. Verano designs, builds and operates inimitable Zen Leaf branded dispensary environments that deliver a superior cannabis shopping experience in both medical and adult-use markets. Learn more at http://verano.holdings/.

About AltMed

The MÜV brand of medical cannabis infused products launched in Arizona in 2016 and quickly gained international attention and recognition. MÜV Dispensaries by AltMed Florida was formed a year later through the partnership of AltMed Enterprises and Plants of Ruskin, a multi-generational Florida agricultural leader. Through continual research and development, MÜV has received multiple patents for its award-winning MÜV Products line that provides quality, consistent and reliable medical cannabis products to patients at all 29 locations (one in Arizona muv-az.com, 28 in Florida muvfl.com, and more added each month). Patients are encouraged to place reservations online at muvfl.com for in-store pickup, order for delivery, or visit any one of the MÜV dispensaries for alternative medical cannabis medicine you can trust.

3 Includes licenses directly owned, managed, or operated; those licenses with which Verano has executed management agreements or other commercial agreements; and/or those licenses to which Verano has a purchase option.

Forward Looking Statements

This press release contains certain “forward-looking information” within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only the Company’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or may contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “will continue”, “will occur” or “will be achieved”. The forward-looking information and forward-looking statements contained herein may include, but are not limited to, information concerning the Transaction and the Merger, expectations regarding whether the Transaction and the Merger will be consummated, including whether conditions to the consummation of the Transaction will be satisfied, expectations for the effects of the Transaction and the Merger or the ability of the Resulting Issuer to successfully achieve business objectives and integrate the operations of the combining companies, expectations regarding financing, and expectations for other economic, business, and competitive factors.

Although Verano believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward- looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and the Company does not undertake to update any forward-looking information or forward-looking statements that are contained or referenced herein, except as may be required in accordance with applicable securities laws. All subsequent written and oral forward- looking information and statements attributable to the Company or persons acting on its behalf is expressly qualified in its entirety by this notice regarding forward-looking information and statements.

***

Contacts:

Investors
Verano Holdings
Aaron Miles
Head of Investor Relations
aaron@verano.holdings

Media
Verano Holdings
David Spreckman
Sr. Director, Corporate Communications & Retail Marketing
david@verano.holdings

Financial Profiles
Debbie Douglas
Senior Vice President
ddouglas@finprofiles.com
949-375-3436

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