Vireo Growth files S‑4 for Planet 13 merger share exchange
The Oct. 9 filing follows a July deal to issue 0.015383618 Vireo share per eligible Planet 13 share, subject to shareholder and regulatory approvals.
Theo Marchetti
The U.S. Securities and Exchange Commission received a cannabis merger registration statement on Oct. 9 under file 333-299395. Vireo Growth Inc. CNSXVREO OTCMKTSVREOF would issue 0.015383618 of a subordinate voting share for each eligible common share of Planet 13 Holdings Inc. CNSXPLTH OTCMKTSPLNH, under the agreement announced July 27.
The Oct. 9 Form S-4 registers securities for a business combination. The share exchange would give Planet 13 investors Vireo stock rather than a fixed cash payment, so the value they receive can change before closing. Issuing new shares would reduce existing Vireo holders' percentage ownership; the eventual dilution depends on how many Planet 13 shares qualify for exchange.
Vireo shares closed at C$13.37 on the Canadian Securities Exchange at 4 p.m. EDT on Oct. 9, according to its CNSXVREO quote page. EDGAR accepted the filing at 4:34 p.m. EDT, after that close, so the price does not measure investors' response to the S-4.
Planet 13 Shareholders Must Approve the Deal
The companies' July 27 announcement says Planet 13 shareholders must approve the transaction, including a simple majority of votes cast after excluding holders specified under Canada's Multilateral Instrument 61-101. The S-4 must also become effective, Vireo's new shares need Canadian Securities Exchange listing approval, and the parties need applicable cannabis regulatory approvals. The Oct. 9 filing is a registration step; it does not complete any of those conditions.
The boards of both companies approved the agreement in July, and Planet 13's special committee recommended it to the company's board. If completed, Planet 13 would become a Vireo subsidiary. Its shares are expected to leave the Canadian Securities Exchange and OTCQX after closing.
"These assets will deepen our existing footprint in Nevada and Florida, while complementing our developing platform in Illinois," Vireo chief executive John Mazarakis said in the July 27 release.
Florida Stores Form the Largest Addition
The companies said in July that Planet 13 would add 36 dispensaries to Vireo's network, including about 33 in Florida. The proposed combination would also bring two Florida cultivation and production facilities with more than 76,000 square feet of space. Nevada would contribute two stores and about 45,000 square feet of active cultivation and production capacity, while the Illinois addition is a Waukegan dispensary.
Read more: Vireo Growth secures US$60M loan for New York and Florida facilities
The July agreement provides for a US$1.8 million termination fee payable by Planet 13 to Vireo in specified circumstances, including a change in the board's recommendation or acceptance of a superior proposal. That amount is a contingent fee, rather than cash consideration in the share exchange.
Planet 13 shareholders' vote, registration effectiveness, exchange listing and cannabis approvals remain the conditions identified by the companies. The Oct. 9 filing records the registration step; the July announcement did not set a date for the vote.
