Verano Holdings Enters into Agreement to Expand Arizona Footprint

Verano Holdings Corp. (CSE: VRNO) (“Verano” or “the Company”), a leading multi-state cannabis company, today announced it has entered into an agreement to acquire three active dispensaries and one cultivation and production facility in Arizona. Upon completion, this transaction would increase Verano’s presence in the key state of Arizona and support the Company’s focus on becoming a market leader in this market. Closing of the transaction is subject to customary conditions, contingencies, and approvals, including regulatory approval.

“Pursuant to our recent go-public, we are strategically focused on expanding our presence in limited-license, high-growth markets,” said George Archos, Co-Founder and CEO of Verano. “Arizona recently added adult-use to its program, and we look forward to accelerating our proven, vertically integrated model to help meet rising demand.”

Transaction Highlights

Verano, Verano Arizona Holdings, LLC (a wholly-owned subsidiary of Verano, “Verano Arizona”), NZCO LLC, an Arizona limited liability company (“NZCO”), Murff & Company LLC, an Arizona limited liability company (“M&C”), JWC1 LLC, an Arizona limited liability company (“JWC”), Hu Commercial Properties LLC, an Arizona limited liability company (“HCP”), and COBISH LLC, an Arizona limited liability company (“Cobish” and together with NZCO, M&C, JWC and HCP, each a “Target Company” and collectively, the “Target Companies”), the board members of AZGM 3, Inc., an Arizona non-profit corporation, the members of Vending Logistics LLC, an Arizona limited liability company, the managers of Vending Logistics LLC, Best-in-Show Holdings L.L.C., an Arizona limited liability company, and the sole member of The Medicine Room LLC, an Arizona limited liability company, and the managers of Medicine Room LLC have entered into a reorganization and merger agreement pursuant to which the Target Companies will merge with and into Verano Arizona. The merger consideration includes US$7,250,000 payable in cash, subject to adjustment, and Class A Subordinate Voting Shares in the capital of Verano (“SVS”) and/or Class B Proportionate Voting Shares in the capital of Verano (“PVS” and together with the SVS, the “Verano Shares”) equivalent to 3,989,875 SVS on an as-converted to SVS basis.

The transaction includes three premium, high traffic and easily accessible dispensaries located in Mesa, Chandler, and Gilbert, Arizona, an 11,000 sq. ft. indoor cultivation facility, an 8,100 sq. ft. greenhouse in Winslow and two real estate locations (collectively, the “Territory Dispensary”). Territory Dispensary began as one of the first infusion kitchens in the state of Arizona, later expanding to cultivation, extraction and retail. Its retail brands Vital and Hi-Klas offer a full suite of products including flower, concentrates, tinctures, infusions and topicals. In connection with this transaction, Verano Holdings, LLC has agreed to pay a finder’s fee equal to US$2,322,059 in a combination of US$1,624,971 in cash and 27,500 Verano Shares (on an as-converted to SVS basis).

“We couldn’t be more thrilled to join a likeminded team that brings passion and a culture of positivity to their communities and team members,” said James Christensen, Co-Founder of Territory Dispensary. “The opportunities that this merger will provide for our team are second to none and we are excited to be a part of the driven and successful Verano family.”

The closing of the transactions described herein are or may be subject to the approval of antitrust and other regulatory approvals, and other customary closing conditions. The transactions are expected to close in late Q1 or early Q2 of 2021.

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