Vireo Growth’s investors were informed in December by the company that it was planning to purchase four U.S.-based companies: Proper Brands, in Missouri; Deep Roots Harvest, in Nevada; WholesomeCo Cannabis, in Utah, and The Flowery, in Florida. Bill’s Nursery was conspicuously missing from the update the company gave last week on previously announced deals.
All three other deals should now close in the second half of this year. When the original deal was announced, it was estimated that Vireo shares worth $397 millions would be purchased by all four companies for $0.625 each. Recently, however, the shares are only being sold for $0.38.
The Flowery
In the circular, The Flowery (also known as Bill’s Nursery) did not get the same summation of merger as the three other companies. Vireo reported that the agreement to merge with Bill’s Nursery was not finalized as of the 23rd of February, and exclusivity under the memo of understanding expired.
Vireo continued to state that Bill’s Nursery was not currently planned to be part of the combined business “and it may not be implemented in the future.”
Vireo and the company signed an unbinding agreement in October 2024. Vireo’s initial merger agreement was drafted with Chicago Atlantic which lends to The Flower. But the talks did not move as fast as others.
Deep Roots
Deep Roots of Nevada operates five dispensaries as well as a production and cultivation facility. The deal looks good. Deep Roots had previously purchased The Source Holdings which operated four retail stores, two provisional retail licences and a cultivation operation.
The Source acquisition resulted in a revenue increase of 8% over 2023.
Deep Roots, as at December 31, 2024 had a working capital of $23.7 Million, compared to $39.5million in 2023. This decline was primarily due to an increase in payables and accruals compared to prior years, largely as a result of the acquisition by The Source Holdings.
Wholesome
Wholesome, based in Utah, also appears to be progressing. Its revenues come from growing, processing and selling cannabis through a dispensary located in the state and via wholesale sales.
Revenues for 2024 were $47.5 millions, which is a 28 percent increase over revenue for 2023. The main reasons for the increase were an increased patient number in Utah and increased sales of delivery services, as well as increased product options and better product quality.
Wholesome reported a working capital figure of $6.7 million as of December 31, 2024. That’s a big jump from the $1.8 millions in 2023.
Proper
Proper is based in Missouri and generates its revenues by growing, processing and selling cannabis through 11 dispensaries as well as wholesale channels. The revenue for 2024 is $90.4 millions, an increase by 19% over 2023.
Proper signed a management services agreement in 2023 with Nirvana Investments. Proper acquired SLCC in 2024. It was a Kansas City-based dispensary. Proper’s operating results for 2024 were boosted from 2023 by five new dispensaries acquired through the MSA and SLCC acquisition.
Proper had a $3.4 million working capital deficit as of December 31, 2024. Cash and cash-equivalents were reduced and the company’s current debt was increased.
Chicago Atlantic
Vireo has a deep relationship with Chicago Atlantic. Chicago Atlantic owns a substantial share of Vireo. Also, it has lending relationships with Proper Deep Roots Bill’s Nursery. Wholesome is the only firm in the deal that did not have a relationship with Chicago Atlantic.
Vireo’s CEO John Mazarakis is also a member of the Chicago Atlantic Group LP.
Deep Roots and Proper are owed a combined total of $29 million and $27.4 millions by Chicago Atlantaic. The debt is still outstanding even after the merger.
Vireo announced its results earlier this month. The company’s fourth-quarter revenues totaled $25 million, and the full-year revenues were $99.4 millions.