MN’s Vireo Health Goes Public (North of the Border)

On March 20th, 2019, Minnesota-bred Vireo Health, a multi-state medicinal cannabis operator, began trading its stock on the Canadian Securities Exchange (the “CSE”). From the CSE:

“Vireo is one of America’s leading multi-state cannabis companies. Vireo is a physician-led, science-focused organization, dedicated to providing patients with best-in-class quality cannabis-based 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. Vireo currently has operations in nine states: Arizona, Maryland, Massachusetts, Minnesota, New Mexico, New York, Ohio, Pennsylvania and Rhode Island.”

Vireo is better known locally as Minnesota Medical Solutions, LLC, (“MinnMed”) one of only two Minnesota licensed medicinal cannabis operators. According to its CSE application, the Company has another Minnesota subsidiary, Minnesota Hemp Research, LLC.

Per the Star Tribune, the company gained status on the CSE, at a cost of $3M, via a reverse takeover or “RTO”, which entails the company taking over a dormant, previously traded company on the CSE. The Company had raised $62M to date.

As of the time of this article, the stock was trading at $5.29 per share, up from $5.00 on its first day of trading. The Company’s current market cap is nearly $530 million.

MinnMed turned a small profit in 2017. Its 2018 financial performance is forthcoming. MinnMed, along with competitor, LeafLine Labs, saw the most dispensary visits in state history in March 2019.

The Company has been embroiled in ongoing legal problems stemming from an alleged illegal transportation of cannabis oils across state lines. From the CSE filing:

“The Minnesota Bureau of Criminal Apprehension (“BCA”) led the investigation into the allegations related to the diversion of medical cannabis. Stemming from this investigation, on February 6, 2017, criminal charges were filed in Wright County, Minnesota against two former executive officers of Vireo, Dr. Laura Bultman and Ronald Owens, charging them with violations of Minnesota state laws governing diversion of medical marijuana products. Neither Vireo nor MinnMed, or any of their current officers or employees, have been charged with any crimes. “