Vireo Growth closes acquisition of Schwazze notes

Executive Summary

• Vireo Growth Inc. closed the acquisition of approximately $91 million of senior secured convertible notes of Medicine Man Technologies Inc. (Schwazze) for about $62 million, issuing ~114.8 million subordinate voting shares as consideration.
• Simultaneously, Vireo entered into a Restructuring Support Agreement (RSA) to restructure Schwazze’s operations and capital structure, including the sale of most assets to a new entity (NewCo) majority‑owned by Vireo.
• Up to $62 million of financing will be provided to NewCo for refinancing Schwazze debt, transaction expenses, and working‑capital needs; remaining Schwazze assets will be wound down with proceeds distributed to claimants.

Key Details

• Notes Acquired: Senior secured convertible notes of Schwazze, principal & interest ≈ $91 M (as of Oct 10 2025).
• Purchase Price: Approx. $62 M (≈ 68% discount to par value).
• Consideration Issued: ~114,807,815 subordinate voting shares of Vireo granted to former noteholders.
• Note Terms: Maturity Dec 2026; interest rate 13.0%; currently in default.
• RSA Provisions:
• Sale of majority of Schwazze assets to NewCo (majority‑owned by Vireo).
• Credit bid by collateral agent at auction, directed by Vireo.
• Asset Purchase Agreement to transfer assets to NewCo in exchange for assumption of specified liabilities and discharge of notes.
• Financing Commitment: Parties agreed to provide NewCo up to ~$62 M; proceeds earmarked for:
• Refinancing Schwazze indebtedness,
• Paying transaction expenses,
• Working‑capital for NewCo.
• Wind‑Down Plan: Any assets not sold will be liquidated; net proceeds distributed to Schwazze claimants/equity holders per legal priority.
• Conditions: Completion subject to regulatory approvals and other customary closing conditions.

Notable Quotes

“We are proud to announce the signing of the restructuring agreement and acquisition of the senior secured notes… we look forward to welcoming the Schwazze team… as we execute our restructuring plan.” – John Mazarakis, CEO, Vireo Growth Inc.

“This transaction… reflects the beginning of an exciting new chapter for Schwazze… we are proud to bring our capabilities into Vireo's growing house of brands.” – Forrest Hoffmaster, CEO, Schwazze