Schwazze, a Denver-based cannabis company, on Monday said it acquired six retail outlets from Colorado competitor Star Buds in a cash and stock deal worth $37.1 million.
The deal announced Monday was a partial step toward completing a $118 million acquisition of all 13 Star Buds stores and a cultivation facility that Schwazze agreed to in June.
The purchase price breaks down to $13.9 million in cash, $13.9 million in a seller’s note and $9.3 million in stock, according to a news release.
The acquisition includes storefronts in Denver, Commerce City, Longmont, Niwot, Pueblo and Pueblo West and brings Schwazze’s total retail footprint to 17 cannabis shops across Colorado.
“The addition of these six Star Buds dispensaries builds on our customer-centric focus, significantly expands our retail operations footprint and enables us to reach positive cash flow beginning in January,” Schwazze CEO Justin Dye said in the release.
The release further noted that the six Star Buds stores are projected to generate around $24 million in revenue for 2020 and that Schwazze expects to acquire the seven remaining stores in the first quarter of 2021, “subject to securing the requisite financing.”
However, at least seven other announced Schwazze acquisitions have fallen through in 2020 for various reasons, including deals for Strawberry Fields, Colorado Harvest Co., Dabble Extracts, Los Sueños Farms, Medically Correct, MedPharm and Canyon.
Schwazze, formerly known as Medicine Man Technologies, trades on the over-the-counter markets under the ticker symbol SHWZ.