The Las Vegas-based cannabis giant Planet 13 Holdings Inc. (CSE:PLTH) (OTCQX:PLNH) is a step closer to a major expansion in Florida.
What Happened
The Florida Office of Medical Marijuana Use (OMMU) gave the green light to Planet 13 for the proposed sale of Planet 13 Florida, Inc. and the acquisition of VidaCann, LLC, the company announced on Monday.
The sale of Planet 13 Florida, which owns a medical marijuana treatment center license issued by the Florida Department of Health to SGW FL Enterprises, LLC, was a closing condition to the company's proposed acquisition of VidaCann.
Planet 13 first announced that it had entered into a membership interest purchase agreement to acquire all of the ownership interests of VidaCann in August for $48.9 million.
"Acquiring VidaCann would significantly accelerate our time to market and, more importantly, scale in Florida. VidaCann is one of the ten largest Florida cannabis operators by retail network size, and we believe it has developed a reputation for high product quality and customer service," Larry Scheffler, the company's CEO said.
OMMU's approval follows Planet 13's recent underwritten public offering of 18.75 million units at $0.60 per unit for total gross proceeds of roughly $11.3 million.
The net proceeds from the offering are expected to fund the acquisition of additional retail cannabis licenses in Nevada and expansion of its retail footprint in Florida and Illinois, among other things, Planet 13 said in March.
Why It Matters
Under the deal, the Nevada-based multi-state operator (MSO) would obtain VidaCann's 26 dispensaries, representing Florida's 9th largest dispensary network.
See also: Florida's $6B Cannabis Market Anticipates 400% Growth Following Court Decision Allowing Nov. Legalization Ballot
The deal makes Planet 13 a direct competitor in a market where medical cannabis giant Trulieve, managed by CEO Kim Rivers, which dominates in Florida. Rivers was a featured speaker at the Benzinga Cannabis Capital Conference in April in Florida. Another top cannabis event, Benzinga Cannabis Market Spotlight is slated to take place in New Jersey on June 17.
Planet 13 would also gain a fully operational greenhouse cultivation facility with a state-of-the-art processing and analytical lab. At total capacity, the lab has the potential to support more than double the amount of the combined Planet 13 and VidaCann dispensary network in the Sunshine State.
Moreover, Florida is on the brink of a significant shift with Amendment 3, a proposal that could legalize cannabis for adults over 21.
What's Next?
The company has extended the end date of the VidaCann acquisition to May 31, 2024, and currently expects to close the transactions in May 2024.
PLNH Price Action
Planet 13's shares traded 2.21% higher at $0.645 per share at the time of writing on Monday morning.
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