Medicine Man Technologies, Inc. has entered into a binding term sheet to acquire five dispensaries operating under the Starbuds brand in Colorado.
Under the terms of the transaction, Medicine Man Technologies will purchase the group of five dispensaries for $31,005,089, which will consist of $15,502,544.50 in cash, the issuance of 2,601,098 shares of its common stock at a price of $2.98 per share, and a deferred cash payment of $7,751,272.25 to be made twelve months following the initial closing date. Based on year-to-date results, management expects the dispensaries to generate over $19 million in revenue in 2019 and in excess of $5.6M in EBITDA.
“The acquisition of these dispensaries operating under the prestigious Starbuds brand will truly be a transformational corporate event for us,” commented Andy Williams, Co-Founder and Chief Executive Officer of Medicine Man Technologies. “Adding these five dispensaries to our Colorado operations will make our vertical supply strategy more efficient and help us grab additional market share through added retail capacity. The Starbuds dispensary operations are truly top-tier in terms of brand, revenue-per-location, and profit across the cannabis retail industry.”
In his trail-blazing efforts, Brian Ruden, the Managing Partner of the group of retail operations being acquired by the Company, has garnered both industry acclaim and brand recognition by creating an exemplary customer experience that includes discounts for cancer patients and veterans. Ruden stated, “I am incredibly excited to join the Medicine Man Technologies team. Together, we are building the most carefully considered cannabis company in the world, with a focus on consumer experience, branding, and profitability.”
“Brian and his team have built an enviable brand and a most successful operation recognized in the industry for its award-winning strains, for its high profitability, and for having the most successful customer loyalty program around,” added CEO Williams. “We happily welcome them and these five locations into the Medicine Man Technologies family.”
The five Starbuds dispensaries being acquired in this transaction are located in Louisville, Longmont, Pueblo, Niwot, and Commerce City.
Management cautions that there can be no assurance that the dispensaries will achieve the stated revenue and EBITDA projections. The terms of the transaction can also be referenced in the Company’s 8-K, which outlines the closing conditions and are conditioned upon the satisfaction or mutual waiver of certain conditions, including regulatory approval.