TORONTO, March 26, 2019 /PRNewswire/ - Cannabis Growth Opportunity Corporation ("CGOC", or the "Company") (CSE: CGOC), a cannabis focused investment corporation with both public and private cannabis holdings, is pleased to report that Vireo Health International Inc. ("Vireo"), one of the private portfolio holdings commenced trading on the Canadian Securities Exchange ("CSE"), under the symbol "VREO", on March 20, 2019, at an opening price of $5.65. In conjunction with its previously announced business combination with Darien Business Development Corp, Vireo raised over US$50 million by way of brokered and non-brokered private placement offerings.
Vireo is a physician-founded and scientifically-focused multi-state medical cannabis company. CEO Dr. Kyle Kingsley founded the Company in 2014 after winning one of only two vertical licenses issued by the state of Minnesota. The Company has gone on to expand its business across multiple states, focusing its efforts on limited license medical states. Vireo has a successful track record of winning licenses in competitive application processes.
Jamie Blundell, President and Chief Operating Officer of CGOC commented, "Vireo has proven to be a committed and dedicated company, who have achieved their goals and objectives as stated. We expect significant upside within the company as they continue to expand their reach across the US.
"Our investment in Vireo has provided a return of 188% in nine months and is a great example of how our private investments can quickly add value to CGOC. This will positively impact our NAV when calculated in April. At the current share price, CGOC represents a unique and vastly discounted opportunity to benefit from the continued success within this sector."
Dr. Kyle Kingsley, CEO and Founder of Vireo commented, "Our partnership with CGOC has been extremely beneficial, providing not only funding, which helped drive our exponential growth in 2018, but also valuable guidance and expertise as we prepared to go list on the CSE. We look forward to continuing our mutually beneficially relationship."
Highlights of Vireo Public Offering:
- Attractive valuation to peers: (priced at 1.9x 2020E Sales and 4.9x 2020E EBITDA vs. US peers which trade at 4.3x 2020E Sales and 15.3x 2020E EBITDA).
- Medical and scientific credibility: A physician founded and led company highly focused on proliferating the use of medical cannabis as an alternative treatment to traditional pain management such as opioids. Vireo values evidence-based research and the development of high-quality IP as a cornerstone to its business model.
- Portfolio of limited licenses: Vireo has a track record for winning in highly competitive ultra-limited license states such as Minnesota (where it won one of two) and New York (where it won one of five, now ten).
- Expansion Opportunities: Vireo's medical credibility and winning track record should prove beneficial as it attempts to expand into conservative states which are initializing medical cannabis programs.
CGOC Return on Investment
CGOC invested in Vireo in July of 2018, for a total of $1,971,710 for 33,500 units consisting of preferred shares in the Company. Subsequent with the go public transaction, the preferred shares were converted (at an exchange ratio of 30.0048) into 1,005,161 common shares of the Company. This represents a gain of $3.7 million or 188% for CGOC.
Vireo Health International, Inc. is America's leading science-focused, multi-state cannabis company. Vireo's physician-led team of more than 300 employees is dedicated to providing best-in-class cannabis products and customer experience. Vireo cultivates cannabis in environmentally-friendly greenhouses, manufactures pharmaceutical-grade cannabis extracts, and sells its products at both company-owned and third-party dispensaries. The Company currently has operations in seven states including Arizona, Minnesota, New York, Pennsylvania, Maryland, Rhode Island, and Ohio.
For more information please visit www.vireohealth.com
CGOC is an investment corporation that offers unique global exposure to the emerging global cannabis sector. CGOC's main objective is to provide shareholders long-term total return through its actively managed portfolio of securities, both public and private, operating in, or that derive a portion of their revenue or earnings from products or services related to the cannabis industry.
Neither the Canadian Securities Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.
SOURCE Cannabis Growth Opportunity Corporation