Vireo Growth Inc. Announces Closing of Proper Brands Acquisition in Missouri

Rhea-AI Summary

Vireo Growth has completed its acquisition of Proper Brands in Missouri through its subsidiaries NGH Investments and Proper Holdings Management. The deal, valued at $102.0 million, was paid entirely in Vireo stock with 196.2 million Subordinate Voting Shares at $0.52 per share. Proper Brands, established in 2022, operates 11 retail dispensaries primarily in St. Louis, with one location in Kansas City and an additional undeveloped license. The company features a 100,000+ square foot cultivation and manufacturing facility and is implementing the Arches technology platform for home delivery. The purchase price represents 4.175x Proper's 2024 Closing EBITDA of $31 million. The deal includes clawback provisions tied to 2026 EBITDA performance and share lock-up provisions spanning 33 months.

Positive

• Strategic expansion into Missouri's adult-use cannabis market with 11 operational dispensaries
• Large-scale 100,000+ sq ft cultivation and manufacturing facility included in acquisition
• Attractive acquisition multiple of 4.175x 2024 EBITDA ($31M)
• Deal structure includes protective clawback provisions based on future EBITDA performance
• Integration of Arches technology platform for home delivery capabilities

Negative

• Significant share dilution with 196.2 million new shares issued
• Extended 33-month lock-up period could impact stock liquidity
• All-stock transaction structure indicates potential cash constraints
• Execution risk in integrating large-scale operations

MINNEAPOLIS , June 05, 2025 (GLOBE NEWSWIRE) -- Vireo Growth Inc. (“Vireo” or the “Company”) (CSE: VREO; OTCQX: VREOF), today announced that it has closed its previously-announced transaction to acquire Missouri-based Proper Brands (“Proper”) through the acquisition of NGH Investments, Inc. and Proper Holdings Management, Inc., subsidiaries of Proper Holdings, LLC, a management company providing services to Proper’s portfolio of 11 retail dispensaries in Missouri.

Proper was founded in 2022 and is currently one of the largest independent operators in Missouri’s adult-use, recreational cannabis market. The company has a total retail footprint of 11 retail dispensaries, with one undeveloped retail license. All stores are in the St. Louis area except for one in Kansas City. The company operates a cultivation and manufacturing facility in excess of 100,000 square feet, and is in the process of implementing the Arches technology platform across its home delivery business.

Total consideration for the transactions was $102.0 million, paid in the form of 196.2 million Subordinate Voting Shares of Vireo at a reference price per share of $0.52. The purchase price of the Proper transaction represents a multiple of 4.175x 2024 “Closing EBITDA” of $31 million. The transaction is subject to clawback provisions if 2026 EBITDA is below Closing EBITDA as of December 31, 2026. The shares issued in the transaction are subject to lock-up provisions, with tranches of shares received in connection with the closing unlocking over a 33-month period.

About Vireo Growth Inc.

Vireo was founded as a pioneer in medical cannabis in 2014 and we are fueled by an entrepreneurial drive that sustains our ongoing commitment to serve and delight our key stakeholders, most notably our customers, our employees, our shareholders, our industry collaborators, and the communities in which we live and operate. We work every day to get better and our team prioritizes 1) empowering and supporting strong local market leaders and 2) strategic, prudent capital and human resource allocation. For more information, please visit www.vireogrowth.com.

Contact Information

Joe Duxbury
Chief Accounting Officer
investor@vireogrowth.com
(612) 314-8995

Forward-Looking Statement Disclosure

This press release contains “forward-looking information” within the meaning of applicable United States and Canadian securities legislation. Forward-looking information contained in this press release may be identified by the use of words such as “should,” “believe,” “estimate,” “would,” “looking forward,” “may,” “continue,” “expect,” “expected,” “will,” “likely,” “subject to,” “transformation,” and “pending,” variations of such words and phrases, or any statements or clauses containing verbs in any future tense and includes, but may not be limited to, statements regarding the Merger Transactions, including the timeline for the closing of the Merger Transactions; shareholder approval of the Merger Transactions; and the regulatory approvals required for the Merger Transactions. These statements should not be read as guarantees of future performance or results. Forward-looking information includes both known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of the Company or its subsidiaries to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements or information contained in this press release. Forward-looking information is based upon a number of estimates and assumptions of management, believed but not certain to be reasonable, in light of management’s experience and perception of trends, current conditions, and expected developments, as well as other factors relevant in the circumstances, including assumptions in respect of current and future market conditions, the current and future regulatory
environment, and the availability of licenses, approvals and permits.

Although the Company believes that the expectations and assumptions on which such forward-looking information is based are reasonable, the reader should not place undue reliance on the forward-looking information because the Company can give no assurance that they will prove to be correct. Actual results and developments may differ materially from those contemplated by these statements. Forward-looking information is subject to a variety of risks and uncertainties that could cause actual events or results to differ materially from those projected in the forward-looking information. Such risks and uncertainties include, but are not limited to: risks related to the shareholder approval of the Merger Transactions; risks related to regulatory approval of the Merger Transactions; and risk factors set out in the Company’s Form 10-K for the year ended December 31, 2024 and the Company’s information statement regarding the Merger Transactions, both of which are available on EDGAR with the U.S. Securities and Exchange Commission and filed with the Canadian securities regulators and available under the Company’s profile on SEDAR+ at www.sedarplus.ca. The statements in this press release are made as of the date of this release. Except as required by law, we undertake no obligation to update any forward-looking statements or forward-looking information to reflect events or circumstances after the date of such statements.

FAQ

What is the value of Vireo Growth's acquisition of Proper Brands?

The acquisition is valued at $102.0 million, paid entirely in stock through 196.2 million Subordinate Voting Shares at $0.52 per share.

How many dispensaries does Proper Brands operate in Missouri?

Proper Brands operates 11 retail dispensaries, with 10 locations in the St. Louis area and one in Kansas City, plus one undeveloped retail license.

What is the EBITDA multiple for VREOF's Proper Brands acquisition?

The purchase price represents a multiple of 4.175x Proper's 2024 Closing EBITDA of $31 million.

What protective measures are included in the Vireo-Proper acquisition deal?

The deal includes clawback provisions if 2026 EBITDA falls below Closing EBITDA, and share lock-up provisions that unlock over a 33-month period.

What assets are included in Vireo's acquisition of Proper Brands?

The acquisition includes 11 operational dispensaries, one undeveloped license, a 100,000+ square foot cultivation and manufacturing facility, and the Arches technology platform for home delivery.