Vireo Growth Inc. Announces Closing of WholesomeCo Cannabis & Arches Merger Transactions
Rhea-AI Summary
Vireo Growth Inc. (VREOF) has successfully closed two strategic acquisitions: WholesomeCo Cannabis, a dominant player in Utah's medical market, and the Arches proprietary technology platform for a total of $69.8 million. The deal was executed through 134.2 million Subordinate Voting Shares at $0.52 per share.
The Wholesome acquisition, valued at 4.175x its 2024 Reference EBITDA of $16 million, includes clawback provisions tied to performance milestones through December 2026. Shareholders agreed to a 33-month lock-up period. The company also expects to close pending mergers in Missouri and Nevada in Q2 2025.
Positive
- Acquisition of WholesomeCo strengthens Vireo's presence in Utah's medical cannabis market
- Purchase price represents reasonable multiple of 4.175x Reference EBITDA ($16M)
- Integration of Arches technology platform provides competitive advantages in digital marketing and consumer loyalty
- 33-month share lock-up period shows selling shareholders' long-term commitment
- Additional merger transactions in Missouri and Nevada expected to close in Q2 2025
Negative
- Significant share dilution with issuance of 134.2 million new shares
- Performance-based clawback provisions indicate execution risks
- WholesomeCo operates only one physical dispensary, limiting physical presence
News Market Reaction – VREOF
On the day this news was published, VREOF gained 5.58%, reflecting a notable positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
– Acquisitions strengthen profitability and competitive position with proprietary technology platform –
– Missouri and Nevada transactions remain on track to close during the second quarter of 2025 –
MINNEAPOLIS, May 12, 2025 (GLOBE NEWSWIRE) -- Vireo Growth Inc. ("Vireo" or the "Company") (CSE: VREO; OTCQX: VREOF), today announced that it has closed its previously-announced transactions to acquire Utah-based WholesomeCo Cannabis (“Wholesome”) and the Arches proprietary technology and analytics platform. Wholesome is a dominant player in the Utah medical market, fueled by a large delivery operation with one single dispensary. The company initially developed the Arches proprietary technology stack in-house, which has developed sophisticated digital marketing and consumer loyalty capabilities.
Total consideration for the transactions was
The acquisitions of Wholesome and Arches are expected to further strengthen the Company’s profitability profile and provide a unique opportunity to build competitive advantages in other markets with a proprietary technology and analytics platform. Vireo management continues to expect that its other pending merger transactions will close during the second quarter.
About Vireo Growth Inc.
Vireo was founded as a pioneer in medical cannabis in 2014 and we are fueled by an entrepreneurial drive that sustains our ongoing commitment to serve and delight our key stakeholders, most notably our customers, our employees, our shareholders, our industry collaborators, and the communities in which we live and operate. We work every day to get better and our team prioritizes 1) empowering and supporting strong local market leaders and 2) strategic, prudent capital and human resource allocation. For more information, please visit www.vireogrowth.com.
Contact Information
Joe Duxbury
Chief Accounting Officer
investor@vireogrowth.com
(612) 314-8995
Forward-Looking Statement Disclosure
This press release contains “forward-looking information” within the meaning of applicable United States and Canadian securities legislation. Forward-looking information contained in this press release may be identified by the use of words such as “should,” “believe,” “estimate,” “would,” “looking forward,” “may,” “continue,” “expect,” “expected,” “will,” “likely,” “subject to,” “transformation,” and “pending,” variations of such words and phrases, or any statements or clauses containing verbs in any future tense and includes, but may not be limited to, statements regarding the Merger Transactions, including the timeline for the closing of the Merger Transactions; shareholder approval of the Merger Transactions; and the regulatory approvals required for the Merger Transactions. These statements should not be read as guarantees of future performance or results. Forward-looking information includes both known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of the Company or its subsidiaries to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements or information contained in this press release. Forward-looking information is based upon a number of estimates and assumptions of management, believed but not certain to be reasonable, in light of management’s experience and perception of trends, current conditions, and expected developments, as well as other factors relevant in the circumstances, including assumptions in respect of current and future market conditions, the current and future regulatory environment, and the availability of licenses, approvals and permits.
Although the Company believes that the expectations and assumptions on which such forward-looking information is based are reasonable, the reader should not place undue reliance on the forward-looking information because the Company can give no assurance that they will prove to be correct. Actual results and developments may differ materially from those contemplated by these statements. Forward-looking information is subject to a variety of risks and uncertainties that could cause actual events or results to differ materially from those projected in the forward-looking information. Such risks and uncertainties include, but are not limited to: risks related to the shareholder approval of the Merger Transactions; risks related to regulatory approval of the Merger Transactions; and risk factors set out in the Company’s Form 10-K for the year ended December 31, 2024 and the Company’s information statement regarding the Merger Transactions, both of which are available on EDGAR with the U.S. Securities and Exchange Commission and filed with the Canadian securities regulators and available under the Company’s profile on SEDAR+ at www.sedarplus.ca. The statements in this press release are made as of the date of this release. Except as required by law, we undertake no obligation to update any forward-looking statements or forward-looking information to reflect events or circumstances after the date of such statements.
FAQ
How much did Vireo Growth (VREOF) pay for WholesomeCo Cannabis and Arches acquisitions?
What is the EBITDA multiple for the WholesomeCo acquisition by Vireo Growth?
What are the lock-up terms for WholesomeCo shareholders in the Vireo Growth acquisition?
What other acquisitions is Vireo Growth (VREOF) planning to complete in 2025?
What happens if WholesomeCo doesn't meet performance milestones under Vireo Growth?
