iAnthus Capital Holdings Inc (CNSX:IAN) has completed its acquisition of GrowHealthy Holdings LLC - marking its full scale entry into Florida, a market which could grow to US$1bn by 2020.
With a population of 21mln people, the move represents a huge opportunity for iAnthus.
"The state's population includes a large percentage of older adults who can derive significant benefits from medical cannabis, and the Florida program has witnessed a rapid rise in its registered patient base since passage of the law," said the group's president Randy Maslow.
"GrowHealthy, in particular, boasts a state-of-the-art, 200,000-square-foot cultivation and processing facility in Lake Wales, a flagship dispensary location in a densely populated area of Palm Beach county, and the opportunity to open up to 25 dispensaries in Florida currently and more in the future."
He added: "...we look forward to contributing iAnthus's capital and operational resources to fully build out GrowHealthy's infrastructure and capitalize on the enormous opportunity provided by Florida's medical cannabis market."
GrowHealthy delivered its first product in November last year and has an inventory of 55 strains.
Total consideration paid by IAnthus was US$17.5mln in cash and US$30.5mln was satisfied in iAnthus shares at US$2.52 each.
GrowHealthy and affiliate McCrory's Sunny Hill Nursery LLC is just one of 13 Florida medical marijuana treatment centres (MMTCs) at the moment licensed to provide medical cannabis.
The acquisition includes GrowHealthy subsidiary GHIAA Management Inc, which holds an exclusive 40-year management contract to operate the medical cannabis business associated with the MMTC licence and an option to acquire 100% McCrory's.
Construction at GrowHealthy's flagship Palm Beach county dispensary is expected to be finished during the second quarter this year and the 4,500-square-foot facility is expected to open in July.
Additional dispensary locations in Palm Beach county and elsewhere around the state have been identified and are the subject of lease negotiations, and dispensary openings in Tampa and Orlando are planned for the third and fourth quarter this year.
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GrowHealthy has already started sales through product delivery and will continue to expand its delivery capabilities throughout the year, said iAnthus.
Arcview Market Research reckons Florida's medical cannabis market will grow into a US$1bn market by 2020, having seen a 300% increase in the number of registered patient in the last six months alone.
iAnthus previously acquired around 6% of GrowHealthy in a preferred share purchase in October last year.
Shares shed 3.55% in Toronto to C$3.80 each.