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DENVER–()–Schwazze, formerly operating as Medicine Man Technologies Inc. (OTCQX: SHWZ) (“Schwazze ” or “the Company”), today announced that it has closed on the asset purchase of an additional two Star Buds Colorado dispensaries located in Denver, CO.

This follows the successful acquisition and integration of six Star Buds retail locations in Colorado in December 2020. The Company plans to acquire the remaining five Star Buds in Colorado by the end of March, for a total of 13. Total consideration for this most recent acquisition was approximately $9.3 million, consisting of $3.5 million in cash, $3.5 million in sellers’s notes, and $2.3 million in Preferred Stock (at a price of $1,000 per share).

Star Buds is a recognized and successful retail cannabis operator in the United States and is home to a wide selection of strains, concentrates, edibles, tinctures, and best-in-class customer service.

“Star Buds is a premier cannabis industry brand and we are thrilled to have now acquired 8 of 13 Colorado locations, with the remaining five locations expected to be acquired by the end of next month. Expanding our portfolio with additional Star Buds dispensaries builds on our customer-centric focus, significantly expands our retail operations footprint, and is expected to increase returns to shareholders,” said Justin Dye, Chief Executive Officer of Schwazze.

Dye continued, “Upon the projected closing of all 13 Star Buds locations in Colorado, Schwazze’s retail footprint will expand to 17 total dispensary locations in the Denver metro and southern Colorado region. Schwazze also has aggressive expansion plans underway in other areas of the state, positioning Schwazze to be the premiere cannabis seed to sale company in Colorado.”

“We are thrilled that an additional two Colorado Star Buds retail locations are joining the Schwazze portfolio and look forward to the final five dispensaries being acquired soon. Becoming a part of Schwazze provides exciting opportunities for Star Buds’ employees, customers and the Colorado cannabis industry,” said Brian Ruden, Star Buds owner, operator, and Schwazze Board Member.

Transaction Background

On June 8, 2020, Schwazze announced that it had reached definitive agreements to acquire all 13 Star Buds locations in Colorado, which are represented by 13 different ownership groups and agreements. On December 21, 2020, Schwazze announced the closing of the asset purchase of the first six of 13 Star Buds Colorado retail locations.

The Company anticipates acquiring the remaining five Star Buds dispensaries in Colorado by the end of March, subject to securing the requisite financing.

Schwazze is creating a leading vertically integrated cannabis holding company with a portfolio consisting of top-tier licensed brands, spanning cultivation, extraction, infused-product manufacturing, dispensary operations, consulting, and a nutrient line, all under one entity. In April 2020, Schwazze was the first publicly traded company to complete an acquisition following the new legislation of Colorado House Bill 19-1090 which allowed for public company ownership of cannabis operations. The Company’s inaugural acquisition included the purchase of Mesa Organics, a Southern Colorado dispensary chain with locations in Pueblo, Ordway, Rocky Ford, and Las Animas as well as Purplebee’s, a leading pure CO2 and ethanol extractor and manufacturer.

Transaction Terms

The acquisition was funded with $6.1 million in proceeds from a private placement under a securities purchase agreement with a Dye Capital & Company managed fund and subscription agreements with unaffiliated investors pursuant to which the Company issued and sold an aggregate of 6,100 shares of Series A Cumulative Convertible Preferred Stock at a price of $1,000 per share. Among other terms, each share of Preferred Stock (i) earns an annual dividend of 8% on the “preference amount,” which initially is equal to the $1,000 per-share purchase price and subject to increase, by having such dividends automatically accrete to, and increase, the outstanding preference amount; (ii) is entitled to a liquidation preference under certain circumstances, (iii) is convertible into shares of the Company’s common stock by dividing the preference amount by $1.20 per share under certain circumstances, and (iv) is subject to a redemption right or obligation under certain circumstances. The terms of the preferred stock are described in the Company’s Current Report on Form 8-K filed on December 23, 2020.

The securities offered in the private placement described above have not been registered under the Securities Act of 1933, as amended, or applicable state securities laws. Accordingly, the securities may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities.

About Schwazze

Schwazze (OTCQX: SHWZ) is executing its vision to become a leading vertically integrated cannabis holding company with a portfolio consisting of top-tier licensed brands spanning cultivation; extraction; infused-product manufacturing; retail dispensary operations; cultivation consulting; and a nutrient line. Schwazze’s leadership includes a seasoned team with proven expertise in cannabis and mainstream CPG, retail and product development industries, as well as top-tier executives from Fortune 500 companies.

As a leading platform for vertical integration, Schwazze is strengthening the operational efficiency of the cannabis industry in Colorado and beyond, promoting sustainable growth and increased access to capital while delivering best-quality service and products to the end consumer. Medicine Man Technologies, Inc. was Schwazze’s former operating trade name. The corporate entity continues to be named Medicine Man Technologies, Inc.

Forward-Looking Statements

This press release contains “forward-looking statements.” Such statements may be preceded by the words “may,” “will,” “plans,” “expects,” “anticipates,” “projects,” “predicts,” , or similar words. Forward-looking statements are not guarantees of future performance, are based on certain assumptions, and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company’s control and cannot be predicted or quantified. Consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with (i) our inability to manufacture our products and product candidates on a commercial scale on our own or in collaboration with third parties; (ii) difficulties in obtaining financing on commercially reasonable terms; (iii) changes in the size and nature of our competition; (iv) loss of one or more key executives or scientists; (v) difficulties in securing regulatory approval to market our products and product candidates; (v) our inability to acquire the remaining Star Buds locations in Colorado; and (vi) actual shareholder returns. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (SEC), including the Company’s Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC’s website at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise.

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