TerrAscend is ready to take over Michigan. It already had a presence in the state, but is adding to it. The cannabis company entered into a definitive deal to acquire KISA Enterprises MI, LLC and KISA Holdings, LLC, or Pinnacle, for $28.5 million. This transaction will reduce TerrAscend’s retail dispensaries from 17 to 32 in Michigan.
This transaction involves the purchase of real estate related to the transaction and six retail dispensary licenses. Five of these are currently operational and are located in the cities Edmore, Camden, Camden, Edmore and Morenci.
TerrAscend states it will rebrand all dispensaries under the Gage or Cookies retail brands, but this will depend on where they are located. All dispensaries will also carry the complete Cookies and Gage brand products, including PowerzzzUp, Runtz and Minntz lines.
Jason Wild, executive chairman at TerrAscend, stated, “We are excited to begin working with the Pinnacle team and can’t wait to roll out our high-quality Gage and Cookies branded products at these dispensaries.”
The total consideration for the transaction amounts to $28.5 million dollars plus earnouts payable upon certain milestones. The deal will be closed cash-free and debt-free with a mutually agreed-upon target level of working capital.
The purchase price will consist of cash, two promissory note amounts of US$10 million each and stock. The agreement stipulates that TerrAscend will pay $10 million in cash to settle all Pinnacle liabilities, encumbrances, and stock and $8.5 million in stock at closing.
The remaining US$10 million will be paid via a promissory note. These notes can only be used to purchase Pinnacle shares and assets. The transaction is subject, among others, to the approval and receipt of all necessary CSE, regulatory and court approvals.
Wild added, “Michigan is a key market for us. This acquisition exemplifies our strategy of building depth to solidify our retail leadership while expanding profitability and scale in the state.”