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Nabis Holdings Inc
Symbol NAB
Shares Issued 35,088
Close 2019-08-08 C$ 70.00
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Nabis Holdings to acquire Ariz. dispensary for $15M (U.S.)

2019-08-12 09:50 ET - News Release

Mr. Shay Shnet reports


Nabis Holdings Inc. has entered into a definitive agreement for the acquisition of 100 per cent of the membership units of a licensed medical marijuana business in Arizona.

The asset, licensed under the provisions of the Arizona Medical Marijuana Act, operates a dispensary in Phoenix, Ariz. The dispensary in Phoenix has been operating since 2015 with proprietary branded products and wholesale operations, including an established distribution network serving more than 50 per cent of the dispensaries in Arizona.

The audited sales for 2017 and 2018 were $7.4-million (U.S.) and $8.7-million (U.S.) respectively. The unaudited revenue for 2019 is on pace for sales of $9-million (U.S.). The dispensary specializes in top-tier flower, vape pens, concentrates, edibles, tinctures and cannabidiol (CBD) products.

"We're excited to sign a definitive agreement for this strategic acquisition of vertically integrated assets in the state of Arizona. Entering Arizona is a key milestone in our business as we leverage our early-mover advantage to capitalize on one of the strongest limited-licence, medical cannabis markets in the U.S.," said Shay Shnet, chief executive officer and director of Nabis.

The dispensary will be rebranded as Nabis after the transaction closes. This transaction also includes a cannabis-infused edibles brand that is available in over 65 licensed retailers across the state. The company has a pipeline of new product innovations that it will continue to roll out through this distribution network once the transaction closes. The dispensary is licensed to operate in the city of Phoenix (Maricopa county), which serves more than 132,000 unique patients, per the Arizona Department of Health Services.

"Expanding the Nabis footprint, bringing industry expertise and high-quality products to Arizona is a top priority for Nabis. We are confident that, given the revenue generation history of the business' existing assets, combined with ongoing initiatives to further expand production and distribution capabilities, Nabis will be well positioned to capitalize on the dramatic growth of the cannabis market in Arizona. We remain focused on identifying opportunities to supplement our operations in the state of Arizona, as well as other attractive limited-license states across the country," concluded Mr. Shnet.

After passing the Arizona Medical Marijuana Act, which took effect on April 14, 2011, Arizona became the 14th state to adopt a medical marijuana law. As of June, 2019, the state had 210,430 registered cardholders eligible to consume medical-grade cannabis products, according to the Arizona Department of Health Services' June, 2019, monthly report.

Nabis will acquire 100 per cent of the membership units of the asset for total consideration of $15-million (U.S.) ($19.65-million (Canadian)), comprising $7-million (U.S.) in cash, $2-million (U.S.) of Nabis' common stock and $6-million (U.S.) deferred for 12 months. The Nabis common stock will be determined by the 10-day trailing volume-weighted average price upon transaction closing.

Arizona continues to be a priority market for Nabis with large-scale growth projections next year. This transaction will expand Nabis' position on operating licensing rights to include a total of 10 locations for retail, cultivation and processing facilities in four states across the United States.

The transaction is subject to customary closing and acquisition conditions, including obtaining all necessary approvals.

About Nabis Holdings Inc.

Nabis Holdings is a Canadian investment issuer that invests in high-quality cash flowing assets across multiple industries, including real property, securities, cryptocurrency, and all aspects of the United States and international cannabis sector. Led by two of the co-founders of MPX Bioceutical, one of the largest takeovers in the United States cannabis space to date, the company has a proven record in emerging markets to create significant shareholder value. The company is focused on investing across the entire vertically integrated aspects of the space, with a focus on revenue generation, EBITDA (earnings before interest, taxes, depreciation and amortization) and growth.

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