Verano announced Friday it terminated a Jan. 31 agreement to acquire Goodness Growth based on its “breaches of covenants and representations,” as well as other termination events. Verano says Goodness Growth owes it a termination fee of $14.875 million and reimbursement of transaction expenses up to $3 million.
“We believe the decision to terminate this arrangement agreement was in the best interest of Verano and our shareholders,” said Verano founder and CEO George Archos. “As we work through the termination process, we expect to provide additional commentary.”
Goodness Growth sayd Verano “has no legal basis” to terminate the acquisition agreement, adding that Verano had also committed “material breaches” of the agreement.
“Goodness vehemently denies all of Verano’s allegations and has complied with its obligations under the Arrangement Agreement in all material respects at all times,” Goodness Growth’s statement reads. “Verano has no factual or legal basis to justify or support its purported grounds for termination of the Arrangement Agreement. Goodness believes that Verano is repudiating the Arrangement Agreement to avoid fulfilling its obligations thereunder after Goodness refused Verano’s request to reduce the agreed-upon consideration payable by Verano under the Arrangement Agreement.”
The companies announced Verano’s plan to acquire all issued and outstanding shares of Goodness Growth on Feb. 1. The move would’ve allowed Verano to expand into the New York, Minnesota and New Mexico markets.