Vireo Growth (CSE: VREO) closes Schwazze dispensary and facilities deal
Rhea-AI Filing Summary
Vireo Growth Inc. completed the acquisition of key assets from Schwazze, including 45 dispensaries across Colorado and New Mexico and two manufacturing facilities, using a credit bid of approximately $111 million of Schwazze’s 13% senior secured notes and assumption of specified liabilities. The credit bid discharged the notes at closing, and a Vireo subsidiary became majority owner of NewCo, which now holds the acquired assets.
To fund its role as lender, CO Acquisition Vehicle entered into a $26,000,000 term loan facility, with $25,000,000 initially advanced at a fixed 20.0% interest rate and a make-whole on certain prepayments through March 30, 2027. NewCo separately entered into a senior secured term loan facility with Chicago Atlantic affiliates, consisting of a Tranche A term loan of about $50 million maturing in 2031 and a Tranche B term loan of about $12.7 million maturing in 2033, both bearing fixed interest of 12.0% payable semi-annually.
The press release notes Vireo is acquiring 24 dispensaries in Colorado, 21 in New Mexico and one manufacturing facility in each state at an assumed share price of $0.661, at an implied estimated valuation of under 4x pro forma EBITDA. Vireo positions the deal as part of a strategy to build a scaled retail presence in Colorado and New Mexico that could grow to over 75 dispensaries over time, and appoints Justin Dye as chairman and Forrest Hoffmaster as CEO of the regional business.
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Insights
Vireo uses a credit bid and high-rate loans to acquire Schwazze’s Colorado and New Mexico assets and expand its retail footprint.
Vireo Growth effectively converts its holdings of Schwazze’s $111 million senior secured notes into ownership of NewCo, which now owns 45 dispensaries and two manufacturing facilities. The credit bid both acquires assets and extinguishes the notes, simplifying Schwazze’s capital structure around the acquired collateral.
Financing relies on layered secured debt. CO Acquisition’s $26,000,000 term loan carries a fixed 20.0% interest rate and a make-whole on larger prepayments or acceleration before March 30, 2027, increasing the cost of early repayment. NewCo’s $50 million Tranche A and roughly $12.7 million Tranche B loans, at 12.0% interest with bullet maturities in 2031 and 2033, create long-dated leverage secured by substantially all NewCo assets.
CO Acquisition holds about $5.5 million of Tranche A and all of Tranche B, so Vireo has both borrower and lender exposure within the structure. The filing notes that CEO John Mazarakis is a partner in an affiliate of the Chicago Atlantic entities acting as administrative and collateral agents, highlighting a related-party dimension that investors may weigh alongside the strategic goal of potentially scaling to over 75 dispensaries in Colorado and New Mexico.
8-K Event Classification
UNITED STATES
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CURRENT REPORT
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| Item 1.01 | Entry into a Material Definitive Agreement. |
The information under Item 2.01 below related to the LSA (as defined herein), to the extent responsive to Item 1.01, is incorporated by reference herein.
| Item 2.01 | Completion of Acquisition or Disposition of Assets |
As previously disclosed, in connection with the acquisition of a majority of the outstanding principal amount of 13% Senior Secured Convertible Notes due December 7, 2026 (the “Senior Secured Notes”) of Medicine Man Technologies, Inc. d/b/a Schwazze (“Schwazze”), Vireo Health of Colorado, LLC, a Colorado limited liability company (“VHC”) and wholly-owned subsidiary of Vireo Growth Inc. (the “Company”), entered into a restructuring support agreement (the “RSA”) with Schwazze and certain related entities on October 10, 2025. Prior to the closing of the Asset Sale (as defined below), a wholly owned subsidiary of the Company, CO Acquisition Vehicle, LLC, a Delaware limited liability company (“CO Acquisition”), acquired the remaining Senior Secured Notes, and as of the closing of the Asset Sale, the Company indirectly held all of the issued and outstanding Senior Secured Notes.
The RSA set forth a plan to restructure the operations and capital structure of Schwazze and its subsidiaries through a series of transactions, including, but not limited to (i) the purchase of certain assets representing a majority of the total assets of Schwazze and its subsidiaries (the “Asset Sale”) by a newly-formed entity, Vireo Health of Rocky Mountain, LLC, a Delaware limited liability company (“NewCo”), that, as of the closing of the Asset Sale, is majority owned indirectly by the Company, and (ii) the liquidation of Schwazze’s remaining assets and winding down of Schwazze’s remaining operations after consummation of the Asset Sale.
The RSA provided for the Asset Sale to be effected by way of a public disposition of collateral pursuant to §§ 9-610 and 9-611 of the Uniform Commercial Code. As previously disclosed, on November 13, 2025, a public auction of Schwazze’s collateral was completed, and the collateral agent under the indenture governing the Senior Secured Notes, acting at the direction of VHC, credit bid approximately $111 million principal amount of Senior Secured Notes on behalf of VHC and other noteholders (the “Credit Bid”). The Credit Bid was determined to be the winning bid upon conclusion of the auction. Following, the auction, Schwazze entered into an asset purchase agreement with NewCo and certain other parties on November 13, 2025 (as amended, the “Asset Purchase Agreement”).
On February 27, 2026, CO Acquisition was acquired by VHC pursuant to a membership interest purchase agreement. Prior to the acquisition, CO Acquisition entered into a First Amendment to Loan and Security Agreement (the “CO Acquisition LSA Amendment”) on February 26, 2026, which amended a Loan and Security Agreement, dated as of September 30, 2025 (as amended, the “CO Acquisition LSA”) by and among CO Acquisition as borrower, Chicago Atlantic Admin, LLC, as administrative agent and the lenders party thereto (the “CO Acquisition Lenders”). The CO Acquisition LSA provides for a term loan facility with a total principal commitment of $26,000,000, of which $25,000,000 was advanced on the closing date of the CO Acquisition LSA with $10,000,000 disbursed to the borrower and $15,000,000 held in reserve. Pursuant to the CO Acquisition LSA Amendment, the CO Acquisition Lenders released the remaining $15,000,000 held in reserve to be used by CO Acquisition to fund its commitment as a lender under the LSA. The outstanding principal balance bears interest at a fixed rate of 20.0% per annum. The default rate of interest is equal to the interest rate plus 10.0% per annum. All interest accrued from the date of the CO Acquisition LSA Amendment until June 3, 2026 is payable in kind. Thereafter, interest will be paid monthly. If the loans are prepaid in an amount equal to $16,000,000 or more or accelerated on or before March 30, 2027, the borrowers must pay a make-whole amount equal to all interest that would have accrued through March 30, 2027. The maturity date of the CO Acquisition LSA is December 31, 2029. The loans are secured by a first-priority lien on substantially all assets of CO Acquisition. The foregoing description of the CO Acquisition LSA is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the CO Acquisition LSA, which is filed as Exhibit 10.1 to this Current Report on Form 8-K, which is incorporated herein by reference.
On March 19, 2026, pursuant to the terms of the Asset Purchase Agreement, the assets subject to the Asset Sale, consisting of 45 total dispensaries in Colorado and New Mexico and two manufacturing facilities, one in each of Colorado and New Mexico, were transferred to NewCo (and certain of its designated subsidiaries) in consideration for (i) the Credit Bid and (ii) the assumption of certain specified liabilities of Schwazze. The Credit Bid resulted in the discharge of the Senior Secured Notes at Closing. Additionally, equity interests in NewCo were distributed by the collateral agent to an indirect wholly owned subsidiary of the Company, which as of the closing of the Asset Sale, held all of the issued and outstanding Senior Secured Notes. As a result of this distribution and certain other transactions, the subsidiary of the Company became the majority owner of NewCo. The foregoing description of the Asset Purchase Agreement is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the Asset Purchase Agreement, which is filed as Exhibits 2.1, 2.2, 2.3 and 2.4 to this Current Report on Form 8-K, which is incorporated herein by reference.
On March 19, 2026, NewCo entered into a Loan and Security Agreement (the “LSA”) with Chicago Atlantic Financial Services, LLC, as administrative agent, the lenders party thereto (the “Lenders”) and NewCo’s existing subsidiaries, as guarantors. The Lenders provided a senior secured term loan facility comprised of two tranches. The Tranche A Term Loan is approximately $50 million in aggregate principal amount, of which CO Acquisition, as lender, holds approximately $5.5 million, and the Tranche B Term Loan is approximately $12.7 million in aggregate principal amount and is held in its entirety by CO Acquisition. Both tranches were advanced in full on the closing date. The Tranche A maturity date is December 31, 2031, and the Tranche B maturity date is December 31, 2033. The loans bear interest at a fixed rate of 12.0% per annum. Interest is payable semi-annually. The outstanding principal balance is due in full for each tranche on its respective maturity date. If the loans are prepaid or accelerated on or before June 19, 2026, the borrowers must pay a make-whole amount equal to all interest that would have accrued through June 19, 2026. The loans are secured by a first-priority lien on substantially all assets of NewCo and its existing subsidiaries, except for those assets described therein as excluded assets. The foregoing description of the LSA is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the LSA, which is filed as Exhibit 10.2 to this Current Report on Form 8-K, which is incorporated herein by reference.
Chicago Atlantic Admin, LLC serves as collateral agent under the indenture formerly governing the terms of the Senior Secured Notes and administrative agent under the CO Acquisition LSA. Chicago Atlantic Financial Securities, LLC serves as administrative agent under the LSA. John Mazarakis, the Company’s Chief Executive Officer, is a partner of Chicago Atlantic Group, LP, an affiliate of Chicago Atlantic Admin, LLC and Chicago Atlantic Financial Securities, LLC.
A copy of the Asset Purchase Agreement has been filed to provide shareholders with information regarding its terms and conditions and is not intended to provide any factual information about the Company or Schwazze. The representations, warranties and covenants contained in the Asset Purchase Agreement have been made solely for the benefit of the parties to the Asset Purchase Agreement, and are not intended as statements of fact to be relied upon by the Company’s shareholders, but rather as a way of allocating the risk between the parties to the Asset Purchase Agreement in the event the statements therein prove to be inaccurate. Statements made in the Asset Purchase Agreement have been modified or qualified by certain confidential disclosures that were made between the parties in connection with the negotiation of the Asset Purchase Agreement, which disclosures are not reflected in the Asset Purchase Agreement attached hereto. Moreover, such statements may no longer be true as of a given date and may apply standards of materiality in a way that is different from what may be viewed as material by shareholders. Accordingly, shareholders should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company or Schwazze. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Asset Purchase Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures. The Company acknowledges that, notwithstanding the inclusion of the foregoing cautionary statements, it is responsible for considering whether additional specific disclosures of material information regarding material contractual provisions are required to make the statements in this Current Report on Form 8-K not misleading.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information under Item 2.01 above related to the CO Acquisition LSA and the LSA, to the extent responsive to Item 2.03, is incorporated by reference herein.
| Item 7.01 | Regulation FD Disclosure |
On March 24, 2026, the Company issued a press release announcing the matters disclosed in this Current Report on Form 8-K, which is attached as Exhibit 99.1 hereto and is incorporated herein solely for purposes of this Item 7.01 disclosure.
Pursuant to the rules and regulations of the Securities and Exchange Commission, the information in this Item 7.01 disclosure, including Exhibit 99.1, and information set forth therein, is deemed to have been furnished and shall not be deemed to be “filed” under the Securities Exchange Act of 1934, as amended.
| Item 9.01. | Financial Statements and Exhibits |
(d) Exhibits.
| Exhibit No. | Description | |
| 2.1+* | Asset Purchase Agreement between Medicine Man Technologies, Inc. d/b/a Schwazze, NewCo, and certain other parties thereto, dated November 13, 2025 | |
| 2.2+ | First Amendment to Asset Purchase Agreement between Newco and Chicago Atlantic Admin, LLC, dated January 29, 2026 | |
| 2.3+* | Second Amendment to Asset Purchase Agreement between Newco and Chicago Atlantic Admin, LLC, dated March 2, 2026 | |
| 2.4* | Third Amendment to Asset Purchase Agreement between Newco and Chicago Atlantic Admin, LLC, dated March 19, 2026 | |
| 10.1+* | First Amendment to Loan and Security Agreement by and among CO Acquisition Vehicle, LLC, as borrower, Chicago Atlantic Admin, LLC, as administrative agent and the lenders party thereto dated February 26, 2026 | |
| 10.2+* | Loan and Security Agreement among Vireo Health of Rocky Mountain, LLC, each Person party thereto as a Guarantor, the creditors party thereto and Chicago Atlantic Financial Services, LLC dated March 19, 2026 | |
| 99.1** | Press Release, dated as of March 24, 2026 | |
| 104 | Cover Page Interactive Data File (embedded within Inline XBRL document) |
+Pursuant to Item 601(a)(5) of Regulation S-K, schedules have been omitted and will be furnished on a supplemental basis to the Securities and Exchange Commission upon request.
*Certain confidential information has been excluded from this exhibit because it is both (i) not material and (ii) the type of information that the registrant treats as private or confidential.
**Furnished herewith
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| VIREO GROWTH INC. (Registrant) | ||
| Date: March 25, 2026 | By: | /s/ Tyson Macdonald |
| Tyson Macdonald | ||
| Chief Financial Officer | ||
Exhibit 99.1
Vireo Growth Inc. Announces Closing of Acquisition of Assets of Schwazze
– Vireo acquires 24 dispensaries in Colorado,
21 dispensaries in New Mexico and 1
manufacturing facility in each of Colorado and New Mexico at an assumed share price of $0.661
– Justin Dye to become Chairman of Vireo’s Colorado and New Mexico business
– Forrest Hoffmaster announced as CEO of Vireo’s Colorado and New Mexico business
MINNEAPOLIS – March 24, 2026 – Vireo Growth Inc. (“Vireo” or the “Company”) (CSE: VREO; OTCQX: VREOF) today announced the closing of its previously disclosed acquisition of certain assets of U.S. multi-state cannabis operator Medicine Man Technologies, Inc. (dba “Schwazze”).
John Mazarakis, Chief Executive Officer of Vireo, commented, “We are pleased to announce the closing of the acquisition of the Schwazze assets. This transaction represents a meaningful step in the continued execution of our disciplined growth strategy, enabling Vireo to expand its presence in key markets through the acquisition of established retail operations at an implied estimated valuation of under 4x pro forma EBITDA. We believe this attractive entry point reflects current market conditions and underscores our focus on capital-efficient growth.
We are honored to partner with Justin Dye, Forrest Hoffmaster, Collin Lodge, and the broader Colorado and New Mexico Schwazze team. Their operational expertise and strong retail focus complement Vireo’s platform, and we look forward to working together to enhance performance across the combined footprint. This acquisition represents an initial step toward a broader strategy to build a scaled retail presence in Colorado and New Mexico, which could grow to over 75 dispensaries over time, subject to market conditions, regulatory approvals, and capital availability. We are pleased to welcome the Schwazze team and their established network of retail dispensaries to Vireo.”
Forrest Hoffmaster, who will be Chief Executive Officer of Vireo’s Colorado and New Mexico-focused businesses, added, “This transaction marks the beginning of a new chapter for the Schwazze team. We are proud to contribute our capabilities to Vireo’s growing platform and remain committed to serving our customers in Colorado and New Mexico with the high-quality products and experiences they expect.”
About Vireo Growth Inc.
Vireo was founded in 2014 as a pioneering medical cannabis company. Vireo is building a disciplined, strategically aligned, and execution-focused platform in the industry. This strategy drives our intense local market focus while leveraging the strength of a national portfolio. We are committed to hiring industry leaders and deploying capital and talent where we believe it will drive the most value. Vireo operates with a long-term mindset, a bias for action, and an unapologetic commitment to its customers, employees, shareholders, industry collaborators, and the communities it serves. For more information about Vireo, visit www.vireogrowth.com.
Contact Information
Joe Duxbury
Chief Accounting Officer
investor@vireogrowth.com
Forward-Looking Statement Disclosure
This press release contains “forward-looking information” within the meaning of applicable United States and Canadian securities legislation. To the extent any forward-looking information in this press release constitutes “financial outlooks” within the meaning of applicable United States or Canadian securities laws, this information is being provided as preliminary financial results; the reader is cautioned that this information may not be appropriate for any other purpose and the reader should not place undue reliance on such financial outlooks. 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,” and variations of such words and phrases, or any statements or clauses containing verbs in any future tense and includes statements regarding (i) the Company’s future product portfolio and its plans related thereto; (ii) future growth opportunities for the Company; (iii) the Company’s enhanced performance over the combined footprint with the Schwazze assets; (iv) the Company’s plans to build a scaled retail presence in Colorado and New Mexico, which could grow to over 75 dispensaries over time; and (v) other statements that are not historical facts. 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 involved with the adverse impact of the acquisition of the Schwazze assets on the Company’s business, financial condition, and results of operations; the Company’s ability to maintain relationships with suppliers, customers, employees and other third parties as a result of the acquisition of the Schwazze assets; the effects of the acquisition of the Schwazze assets on the Company and the interests of various constituents; risks and uncertainties associated with the acquisition of the Schwazze assets, some of which are beyond the Company’s control; the nature, cost, impact and outcome of pending and future litigation, other legal or regulatory proceedings, or governmental investigations and actions; risks related to the timing and content of adult-use legislation in markets where the Company currently operates; current and future market conditions, including the market price of the subordinate voting shares of the Company; risks related to epidemics and pandemics; federal, state, local, and foreign government laws, rules, and regulations, including federal and state laws and regulations in the United States relating to cannabis operations in the United States and any changes to such laws or regulations; operational, regulatory and other risks; execution of business strategy; management of growth; difficulties inherent in forecasting future events; conflicts of interest; risks inherent in an agricultural business; risks inherent in a manufacturing business; liquidity and the ability of the Company to raise additional financing to continue as a going concern; the Company’s ability to meet the demand for flower in its various markets;; our ability to dispose of our assets held for sale at an acceptable price or at all; and risk factors set out in the Company's Form 10-K for the year ended December 31, 2025, which is 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.com.
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
What assets did Vireo Growth Inc. (VREOF) acquire from Schwazze?
How was the Schwazze asset acquisition by Vireo Growth financed?
What are the key terms of Vireo’s CO Acquisition Vehicle loan facility?
At what valuation is Vireo Growth acquiring the Schwazze assets?
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