In regards to a question on whether Sol would sell VeranoThis was response to another articles question posed about whether Sol would sell it's stake in Verano soon:
*********************************** In terms of Bluma, they still retained 33% (i.e., the majority) of their ownership which will eventually become Cresco. It is my understanding that they eliminated some of it just to satisfy Florida compliance issues. In terms of Verano, it is hard to say. They have a sizeable loan coming due in July (i.e., 1235 who is the lender named in the suit) which, with acrued interest, is probably an >$56MM liabilitlity. Some of the proceeds from the Bluma sale will be used for operations and the rest will probably be used for partial satisfaction of the loan. There are a few options for them to satisfy the remaining balance: 1. Refinance the remaining balance through another lender (i.e., the company announced in the press release that they will not use 1235 anymore as lender). They could also collateralize/securitize the loans with one or more of their assets. 2. Raise additional equity/capital (e.g., given their recent performance and also upcoming uptick expected with Verano, they may be able to raise sufficient capital to cover the loan) 3. Sell off stakes in one or more of their public companies: a. Bluma b. Verano c. Engine Media d. Jones Soda 4. Sell off one of their stakes in their private company portfolios (e.g., HeavenlyRx) In terms of Verano, when I had done a group call with the CEO of Verano, he had said that all prior Verano shareholders were going to be under some form of a lockup. Whether he had said that "off-the-cuff" and was incorrect is hard for me to say. But if true, that would mean Sol would be prohibited from selling anytime soon (although they could look at otherways to collaterlize or enter into a side-transaction "effectively" selling them in the future I suppose). I think it is unlikely Verano would sell off, unless Verano traded above $20/share.....based on my own analysis.....Verano should traded between $20 - $30/share. Beacon has a price target of $32/share. If Verano trades closer to the higher end of that valuation, than it may consider selling to maximize value for the shareholders and reallocating capital to higher return assets. So the end answer is that its a "maybe" on "selling off Verano" but because of everything I said above, I think its unlikely (since: a. they have many alternatives to satisfy the pending loan coming due, b. there is likely a lock-up they are under, and c. Verano may not trade at the high end of the range). Hope that helps put things in perspective and looking forward to Wednesdays open on Verano!
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