Vireo Growth Inc. Finalizes $20 Million Acquisition of Pennsylvania Medical Cannabis Dispensary License

Transaction Details and Financial Structure

Vireo Growth Inc. has secured all issued and outstanding limited liability company membership interests of PhytoNatural via a joint venture with Hive Holdings, Inc. This transaction was executed under a Securities Purchase Agreement previously disclosed to investors.

The $20.0 million consideration for PhytoNatural is split into two parts: Vive Penn, LLC, the joint venture entity, paid $8.0 million in cash at closing, while the remaining $12.0 million consists of approximately 645,161 subordinate voting shares of Vireo at a deemed issue price of $18.60 per share. These shares are scheduled for issuance two years post-closing, per the Securities Purchase Agreement terms, allowing Vireo a two-year period before full equity consideration is due.

Scope of Pennsylvania Medical Cannabis Retail Permit

The acquisition includes a non-operational Pennsylvania medical cannabis retail permit, offering Vireo a significant entry into the state market. Subject to regulatory approvals, the permit authorizes operation of up to six dispensaries across Pennsylvania.

Given the permit’s non-operational status at acquisition, Vireo must undertake development and operational activities to launch the dispensaries. Regulatory approval will be essential to realize the permit’s full value as the company works towards opening authorized retail locations statewide.

Joint Venture Collaboration with Hive Holdings

The acquisition was structured through Vive Penn, LLC, a joint venture between Vireo Growth Inc. and Hive Holdings, Inc. This arrangement enabled both parties to participate in the PhytoNatural acquisition, with Vive Penn responsible for the cash payment at closing and Vireo providing the deferred equity consideration.

Such joint venture structures are common in the cannabis sector, facilitating shared capital requirements, regulatory compliance, and operational management. Through Vive Penn, Vireo and Hive Holdings can coordinate efforts to develop and operate Pennsylvania dispensaries under the acquired permit.

Vireo’s Expanded Multi-State Cannabis Platform

Vireo Growth Inc. operates a vertically integrated cannabis business encompassing cultivation, manufacturing, retail dispensaries, home delivery, distribution, and agricultural supply. As of the announcement, the company runs operations in 10 states with over 170 dispensaries nationwide.

The addition of the Pennsylvania dispensary license strategically broadens Vireo’s retail footprint. With authorization to open up to six dispensaries in Pennsylvania, the company continues executing a disciplined capital allocation strategy focused on acquiring licenses and operational assets in key U.S. markets. Vireo aims to enhance its portfolio of consumer brands and services while increasing market share across its operating regions.

Regulatory Approval Process for Dispensary Operations

The acquisition is contingent on obtaining applicable regulatory approvals, a standard industry requirement. The announcement does not specify which regulatory bodies must grant approvals or the timeline for completion. Investors should follow Vireo’s future disclosures for updates on regulatory progress and expected operational launch dates.

Pennsylvania’s medical cannabis program has established retail frameworks, and the permit represents pre-existing authorization. However, additional regulatory steps—such as licensing individual retail locations, compliance certifications, and ongoing state oversight—may be required before dispensaries can become operational. Efficient navigation of these requirements will be critical for Vireo to capitalize on the permit’s commercial potential.

Deferred Equity Issuance and Capital Impact

The deferred share issuance involves approximately 645,161 subordinate voting shares to be issued two years after closing, representing the $12.0 million equity portion at a deemed price of $18.60 per share. This structure defers shareholder dilution while Vireo integrates the Pennsylvania acquisition and develops operations.

The two-year deferral provides time to integrate operations, generate results, and potentially improve share price before equity issuance. The ultimate number of shares and dilution impact will depend on Vireo’s capitalization at issuance in 2028.

Strategic Importance of Pennsylvania Market Entry

Acquiring the PhytoNatural permit, which authorizes up to six dispensaries in Pennsylvania, aligns with Vireo’s targeted geographic expansion strategy. Pennsylvania is among the largest U.S. medical cannabis markets, featuring established regulations and substantial patient demand. The state’s mature program offers stable demand and operational feasibility for retail operators.

Securing multi-dispensary authorization enables Vireo to build regional market presence and distribution capacity within Pennsylvania. This supports the company’s strategy of disciplined capital allocation, strategic acquisitions, and local market execution to scale its platform and enhance long-term shareholder value. The permit offers operational flexibility and geographic diversification within a key state.

Complementary Operations and Market Synergies

Vireo’s business extends beyond retail into cultivation, manufacturing, home delivery, and agricultural supply, creating a diversified platform across cannabis and related agricultural markets. The Pennsylvania expansion will allow Vireo to leverage existing cultivation and manufacturing capabilities to supply new retail locations.

With multi-state operational experience and established supply chain infrastructure, Vireo is well-positioned to efficiently launch Pennsylvania dispensaries and integrate them into its network of over 170 locations nationwide.

Forward-Looking Statements and Integration Outlook

Vireo’s announcement contains customary forward-looking statements about the PhytoNatural Transaction’s benefits, consideration value, and acquisition integration. The company cautions these statements involve risks and uncertainties, including regulatory approval receipt, integration challenges, and maintaining supplier, customer, and employee relationships.

Actual results may differ materially due to regulatory developments, market conditions, litigation, and operational factors. Investors should monitor Vireo’s upcoming quarterly and annual reports for updates on integration progress, regulatory status, and operational metrics related to the Pennsylvania dispensaries as they become operational.