Vext Science, Inc. (“Vext” or the “Company”) (CSE: VEXT) (OTCQX: VEXTF) a cannabinoid brand leader based in Arizona, leveraging its core expertise in extraction, manufacturing, cultivation and marketing to build a profitable multi-state footprint, today announced that an affiliated entity (the “Affiliate”) of Appalachian Pharm Processing, LLC, an Ohio limited liability company (“APP”), has received a Level I Cultivator provisional license (the “License”) to be co-located at the APP facility at 16064 Beaver Pike, Jackson, Ohio (the “Facility”). The License, granted by the Ohio Department of Commerce, will enable the Affiliate to build-out an initial cultivation area of up to 25,000 square feet, with the potential to expand up to 50,000 square feet following further application and approval.
The Facility will be co-located with APP’s manufacturing operations and has the potential to expand up to a 75,000 square foot cultivation footprint, within the current building envelope. The Affiliate expects the build-out to 25,000 square feet to be completed during Q3 2022. Similar to the letter of intent that resulted in the Company acquiring a 37.5% interest in APP, the Company has a letter of intent to acquire a 37.5% ownership percentage in the Affiliate. This ownership transfer cannot occur until the Affiliate has received a certificate of operation from the Ohio Department of Commerce (the “Department”) and, thereafter, received the Department’s approval for such transfer. The transfer is subject to the Department’s review and approval and may not take place as contemplated or at all.
Eric Offenberger, CEO of Vext commented, “The Affiliate’s receipt of a Level I Cultivator provisional license follows closely on the heels of the announcement that we had secured ownership in a manufacturing license in the State and represents the final step toward achieving near-term vertical integration in Ohio. In our experience, building cultivation capacity in limited license states with large populations and adult-use upside, is a clear path to generating solid returns on capital for shareholders. In July 2022, we expect that we will be able to apply for a change in ownership on a retail license in Ohio, which, once approved, will bring us one step closer to obtaining a fully operating vertically integrated footprint in two very attractive, limited license states – Arizona and Ohio.”
Mr. Offenberger continued, “Over the next 12 months Vext has a full pipeline of organic growth opportunities to execute in Arizona as well as Ohio, backed by a strong balance sheet and solid cash flow profile. In addition, we see further opportunity to add accretively to our current foundation, as smaller operators look for better alternatives to a deal with a large multi-state operator, with room to scale and participate in the building of a more focused, profitable platform.”
Ohio’s state-sanctioned cannabis sales are expected to be between US$350 million to US$425 million in 2021, under a highly regulated, medical-only framework, compared to US$221.5 million in 2020i.