Vireo Health Sells Equity in Pennsylvania Medical Solutions to Jushi Inc.

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MINNEAPOLIS – Vireo Health International, Inc. (“Vireo” or the “Company”) (CNSX: VREO; OTCQX: VREOF), the science-focused, multi-state cannabis company with active operations in exclusively medical-only markets and licenses in nine states and the Commonwealth of Puerto Rico, today announced that it has reached a definitive agreement with Jushi Inc, a subsidiary of Jushi Holdings, Inc. (“Jushi”) (CSE: JUSH) (OTCQX: JUSHF), to divest equity in its subsidiary company, Pennsylvania Medical Solutions, LLC (“PAMS”), for total consideration of $37 million. The transaction is subject to regulatory approvals.

Pennsylvania Medical Solutions holds a permit for the cultivation and processing of medical cannabis in the state of Pennsylvania. This permit was initially awarded to PAMS through a merit-based application process in 2017. Based in Scranton, PAMS manufactures cannabis-based products in a 90,000 square foot co-located cultivation and processing facility, which recently underwent a significant capacity expansion project in order to meet increasing demand within Pennsylvania’s burgeoning medical cannabis market.

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“This transaction secures Vireo’s capital position for the foreseeable future and will enable us to comfortably execute our fiscal year 2020 operating strategy and begin generating positive cash flow in the first half of next year without requiring any additional capital infusions,” said Founder & Chief Executive Officer, Kyle Kingsley, M.D. “We’re especially pleased to achieve this milestone for shareholders without the dilutive impacts of other forms of financing, and we’re also very excited about the opportunities in front of us to re-invest a portion of these proceeds to increase scale in select markets where we see significant opportunities to improve revenue growth and future cash flow generation.”

The transaction’s total consideration of $37 million includes $16.3 million in cash, $3.8 million in the form of a four-year note with an 8 percent coupon rate payable quarterly and $17 million in Right of Use liabilities associated with long-term lease obligations. The transaction also includes an 18-month option for Jushi to purchase equity in another Vireo Health subsidiary, Pennsylvania Dispensary Solutions, LLC, for an additional $5 million in cash.

Vireo management expects to utilize a portion of the transaction proceeds for capital expenditures that will increase scale in its core markets of New York, Minnesota, Maryland, Arizona, and New Mexico. These development projects are expected to significantly improve the Company’s near-term revenue and profitability outlook, and management anticipates discussing these development projects and other impacts of this transaction in more detail during the Company’s upcoming second-quarter earnings conference call in late August.


About Vireo Health International, Inc.
Vireo Health International, Inc. is a physician-led cannabis company focused on building long-term, sustainable value by bringing the best of medicine, science, and engineering to the cannabis industry. With operations strategically located in early-stage, limited-license medical markets, Vireo manufactures pharmaceutical-grade cannabis products in environmentally-friendly greenhouses and distributes its products through its growing network of Green Goods retail dispensaries and hundreds of third-party locations. Its current core medical markets of New York, Minnesota, Pennsylvania, Arizona, New Mexico, and Maryland all have the potential to enact adult-use legalization in the next three to 24 months, and two additional markets in Puerto Rico and Massachusetts also have potential for commercialization. Combined with its teams’ focus on driving scientific innovation within the industry and securing meaningful intellectual property, Vireo believes it is well positioned to become a global market leader in the cannabis industry. Today, eight of its 10 markets are operational with 13 of its 32 total retail dispensary licenses open for business. For more information about the company, please visit www.vireohealth.com.

About Jushi Holdings Inc.
Jushi Holdings, Inc. is a globally focused cannabis and hemp company led by an industry leading management team. In the United States, Jushi is focused on building a multi-state portfolio of branded cannabis and hemp-derived assets through opportunistic acquisitions, distressed workouts and competitive applications. Jushi strives to maximize shareholder value while delivering high quality products across all levels of the cannabis and hemp ecosystem. For more information please visit www.jushico.com or the Company’s social media channels on Instagram, Facebook, Twitter and LinkedIn.

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