Schwazze, formerly operating as Medicine Man Technologies Inc., said it has terminated the deals to acquire two marijuana businesses in Colorado due to key business and valuation issues.
The vertically-integrated cannabis company terminated the acquisition of Dabble Extracts, a cannabis concentrates company, and Los Sueños Farms, an outdoor and greenhouse cannabis cultivator.
Schwazze also provided a business update and shared the pro forma financial results reflecting its acquisition of Mesa Organics, which closed on April 20, 2020. The company noted that in its pro forma 2019 income statement, Mesa Organics was accretive to Schwazze by $0.09 per share.
Schwazze added it believes the business will continue to be accretive to its overall platform.
Schwazze noted that following the signing of Colorado House Bill Colorado 19-1090, it moved forward on the numerous term sheets with Colorado cannabis operators, and completed limited due diligence.
However, Schwazze added it identified key business and valuation issues throughout the merger and acquisition process. As a result, the company decided to no longer pursue the acquisitions of Dabble and Los Sueños Farms. But the company did not specify what the issues were.
“We know that continuing to focus on shareholder return is the right thing to do at this time. Our Board believes that it is in our best interest to build a differentiated business in Colorado,” said Justin Dye, Chairman and Chief Executive Officer of Schwazze.
Schwazze said it is continuing negotiations with its previously announced acquisitions of Roots Rx, Medicine Man, MedPharm, Canyon Cultivation, and Medically Correct. The company reiterated its commitment to establishing a leading vertically integrated platform in the cannabis space.
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