Medicine Man Technologies, Inc. (OTCPK:SHWZ) signed a definitive agreement to acquire All Assets of Reynold Greenleaf & Associates, LLC and Elemental Kitchen & Laboratories, LLC from Reynold Greenleaf & Associates, LLC, William N. Ford and others for $46.5 million on November 29, 2021. Schwazze will also have a right to purchase or acquire cannabis licenses held by Medzen Services, Inc., ("Medzen") and R. Greenleaf Organics, Inc. Total consideration for acquisition will be $42 million subject to customary adjustments for working capital, inventory, debt, seller transaction and cash, with a potential performance based earnout. The consideration will consist of $25 million in cash payable at closing and $17 million in form of an unsecured promissory note at 5% interest and a potential “earn-out” payment of up to an additional $4.5 million based on the EBITDA of Greenleaf for calendar year 2021.

Agreement contemplates that a subsidiary of Medicine will enter into agreements with Medzen Services, Inc. and R. Greenleaf Organics, Inc. (NFPs) that would provide Medicine subsidiary with an option to purchase equity or assets of NFPs, including cannabis licenses, at such time as such an acquisition would be permitted under applicable New Mexico laws and regulations. Schwazze anticipates using the proceeds from $93 million of funding amount of convertible notes to fund the cash consideration of transaction. Medicine expects to fund cash portion of Consideration from cash then on hand.

At closing, Nuevo Holding, LLC must be satisfied that it will have control of board of directors of each NFP following closing and that each NFP's sole member has been changed to a member or members designated by Nuevo Holding, LLC. The acquisition is subject to closing conditions and covenants customary for this type of transaction, including, obtaining applicable New Mexico Regulation and Licensing Department (RLD) approvals and local regulatory authorities, Bill of Sale and Assignment and Assumption Agreement. Transaction is targeted to close within the next quarter.

Michael Froy from Dentons acted as legal advisor to Schwazze. Jeremy S. Wysocki from Wysocki Law Group, P.C. acted as a legal advisor to William Ford. Perella Weinberg Partners LP is serving as financial advisor to Schwazze.

Schwazze was represented by Brownstein Hyatt Farber Schreck, LLP on legal matters.