Goodness Growth Holdings, Inc. is selling its subsidiary, Vireo Health of New York, to ACE Ventures, LLC for a purchase price between $3 million and $5 million.

Subject to closing conditions and regulatory approval, ACE will assume Vireo Health’s licenses, inventory and assets, as well as a lease agreement with Innovative Industrial Properties (IIP) for the company’s Johnstown, New York cultivation and manufacturing campus. The transaction is expected to close by June 30.

ACE will assume Vireo’s financial liabilities, including its operating losses, beginning on April 1. These activities are expected to be supported initially by a $2.5 million unsecured loan from Goodness Growth to Vireo.

In addition, the companies have entered into collaborative advisory agreement that retains Goodness Growth’s management and compliance oversight in return for an approximate 15 percent share of net profits.

Founded by life-long New Yorker Steven Acevedo, a television and film producer who has worked with some of the world’s most recognizable entertainers, ACE’s mission is to bring New York quality and affordable cannabis, while investing in communities that have been disproportionately affected by the War on Drugs.

“We are thrilled to reach this agreement with Goodness Growth and are excited to enter New York’s cannabis industry,” Acevedo said. “We are prepared to showcase the strength of our team and to support a thriving industry in New York that benefits both consumers and communities that have been impacted by the failed War on Drugs. With more stores opening regularly, our timing feels impeccable, and we’re pleased to have Goodness Growth’s continued involvement in the management of our operations. After spending considerable time with their team and observing the success they've had with renewed operational focus in Maryland and Minnesota, we see great benefit to a collaborative relationship that helps ensure long-term success for both of our organizations.”

Goodness Growth also has executed an eighth amendment to its lease with IIP for the Johnstown campus. The amendment extends a lease termination option until June 30 and adds a purchase option of the facility for the tenant.

ACE will invest $20 million to fund the development of the license and support the transfer of the IIP lease, and intends to acquire the Johnstown cannabis cultivation and manufacturing campus by executing the two-year purchase option.