DionyMed Acquires MM Esperanza22 for $19.1M to Expand South California Distribution

Recently, VCBeat (WeChat ID: vcbeat) learned from foreign media reports that DionyMed, a well-known U.S. medical cannabis manufacturer, acquired the cannabis business of MM Esperanza22 for $19.1 million and purchased its 1.83-acre cannabis campus from MM Esperanza22. Following the announcement, DionyMed’s stock price immediately rose by 5%.

This acquisition will enable DionyMed to expand its operations in Southern California and serve the entire state of California. Under the terms of the acquisition, DionyMed will pay MM Esperanza22 $13.067 million in cash and issue $6 million worth of DionyMed Class A multi-voting shares. The transaction is expected to be completed on or before July 23, 2019. The shares issued by DionyMed to MM Esperanza22 will be subject to a 120-day holding period, and DionyMed shall have the right, but not the obligation, to repurchase these shares within the following 12 months at a price representing a 10% premium over the share price at the closing of the MMAC transaction.

The definitive agreement for DionyMed’s acquisition of MM Esperanza22’s 1.83-acre cannabis campus in Los Angeles includes: the Southern California Consumer Center, a retail pharmacy storefront, 600 medical marijuana delivery drivers, and assets such as leased premises, equipment, and licenses.

Upon completion of the transaction, DionyMed will launch the “Chill” brand in Southern California in the third quarter of 2019 to enhance its brand distribution in the region. In terms of production capacity, the Los Angeles facility will provide a direct-to-consumer delivery platform, supported by more than 600 drivers on a daily basis.

Edward Fields, CEO of DionyMed, commented, “Our ability to effectively deliver and distribute today’s most popular medical cannabis products in California, the world’s largest medical cannabis market, is a key factor for us in this explosively growing industry. As we continue to expand our operational footprint in Northern California, the new 1.83-acre Los Angeles Cannabis Campus provides DionyMed with the scale and expansion capacity to better meet the rapidly growing demand among California consumers for safe, premium medical cannabis brands.”

Founded in 2017, DionyMed is a rapidly growing medical cannabis brand and distribution platform that supports the medical and adult-use cannabis markets, manufacturers, and award-winning brands. Following the legalization of adult-use cannabis in California in January 2018, DionyMed expanded its operations from manufacturing to distribution. The company offers a diverse portfolio of branded products, ranging from flower and vape cartridges to concentrates and edibles. With its expanding product and brand lineup, DionyMed serves over 700 dispensaries and delivers more than 40,000 direct-to-consumer products each month.

MM Esperanza22 cultivates, produces, and sells medical cannabis products in Southern California. Its operations include retail dispensaries, distribution facilities, manufacturing centers, and consumer-facing fulfillment centers. The company was founded in 2016 and is headquartered in Beverly Hills, California.

(Compiled by Xu Wenjuan)