Cannabis producer Greenrose Holding Company Inc. (OTC:GNRS) announced Monday that it has wrapped up its previously announced acquisition of the assets of Arizona-based True Harvest, LLC.
What Happened
Under the terms of the acquisition, Greenrose paid consideration of $57.6 million at the close.
The sum included $12.5 million in cash, $23 million in the form of a convertible note, $4.6 million in assumed debt, and $17.5 million in shares of the company's common stock.
The Amityville, New York-based company said that it would pay up to $35 million in the form of an earnout and payable in shares of its common stock within the next three years once True Harvest achieves a specific price point per pound of cannabis flower relative to total flower production.
Why It Matters?
Mickey Harley, CEO and director of Greenrose said that the move "expands Greenrose's footprint into the Southwest and demonstrates the continued execution of our growth strategy."
"We look forward to working with True Harvest's talented cultivation team to continue building our company around high-quality flower," Harley continued. "With our strong cultivation footprint in Arizona and Connecticut, we believe our platform is well-positioned to capture the growth opportunities offered by these new and emerging recreational markets."
What's Next?
Combined, True Harvest and Theraplant are expected to generate between $120 million and $140 million in the full year 2022 revenue, 2022 net income of between $8 million and $14 million, and 2022 adjusted EBITDA between the range of $75 million and $85 million.
In addition, Greenrose Holdings revised its 2022 outlook for True Harvest and Theraplant to reflect an expected fourth-quarter 2022 start for recreational cannabis sales in Connecticut after following through with its business combination with the acquisition of Theraplant LLC on November 26.
GNRS Price Action
Greenrose Holding's shares traded 21.54% per share at the time of writing on Monday morning.
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