Michigan-based cannabis company Skymint is announcing the acquisition of 3Fifteen Cannabis and closing of a $78 million funding round.
According to information procured exclusively ahead of an official announcement, the company has closed on a concurrent $70 million senior secured term loan from Tropics LP, an affiliate of Sundial Growers’ JV SunStream Bancorp Inc. In addition, Skymint received an $8 million equity investment from Merida Capital Holdings.
“With trends accelerating towards national legalization, and a rapidly evolving consumer, Merida is focused on building the most recognized consumer brands and retail footprints in the largest markets. Our partnership with and investment in SKYMINT is a critical step towards delivering on our objective. Michigan is a highly attractive market with a median population age of 39.5 where one in five are active cannabis consumers,” said Mitch Baruchowitz, CEO of Merida Capital Holdings and a member of Skymint’s board of directors.
The acquisition and financing will further strengthen Skymint’s position both in and beyond its home state of Michigan, management explained.
3Fifteen Cannabis currently operates 12 dispensaries in Michigan. With this purchase, Skymint will boast 27 retail locations in Michigan. The company plans to open at least 3 more stores this year and another 15 in 2022.
“With national legalization an eventual inevitability, the cannabis industry is in the middle of a massive transformation. Now more than ever, cannabis companies are competing for dominant market share in and out of their respective states. The fastest way to secure a dominant position is through consolidation, mergers and acquisitions. In our case, Skymint nearly doubled our Michigan market share and footprint overnight with our acquisition of 3Fifteen Cannabis,” said CEO and co-founder Jeff Radway.
Commenting on Merida’s support, he added, “Merida’s mission is to help accelerate the rapid development of the cannabis industry through targeted investments – and the facilitation of strategic M+A activity – that increase companies’ sizable market share. Expanding operations in Michigan – the U.S.’ fastest growing cannabis market – is at the heart of SKYMINT’s growth strategy, and we look forward to showing what can be achieved through a maximized Michigan footprint.”
The $78 million capital injection will help strengthen Skymint’s balance sheet as it gears up for expansion.
“As one of the early entrants to this market with an impressive track record and healthy balance sheet, we believe Skymint is ideally placed for rapid growth and look forward to supporting Michigan’s largest vertically integrated cannabis operator as they execute on their strategic plans,” said a spokesperson for SunStream Bankorp.
According to Radway, the company intends to expand throughout the Midwest and East Coast. This announcement, he said, brings it closed to its goals.
“Skymint is here to build a unique, memorable, and consumer-first retail brand with a portfolio of best-in-class products. With our acquisition and financing, Skymint is now in the strongest possible position to enter the next phase of our journey – creating more personalized consumer experiences, driving more value to our combined retail locations, amplifying brands on our platforms, and further scaling our presence in, and eventually outside of, Michigan,” he concluded.
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