Acreage Holdings, Inc. (CSE: ACRG.U; OTC: ACRGF; FSE: 0ZV) is aiming to move into a potentially lucrative Oakland dispensary by entering an agreement to acquire Kanna, Inc.

The terms of the all-stock deal, valued at $11.5 million, will see Acreage acquiring 100% off Kanna, including a recently-licensed storefront located on MacArthur Blvd. in Oakland, CA.

While Oakland allows an unlimited number of non-dispensary businesses – such as cultivation spaces or laboratory testing facilities – the city currently only allows up to a maximum of 16 dispensaries.

Kanna Inc. nabbed a license granted via a literal bingo cage lottery last year, echoing the randomized drawings for the first retail storefronts chosen for Ontario earlier this year.

The Oakland lottery prioritized businesses run by individuals living in low-income neighbourhoods who had been convicted of a cannabis-related crime in the city. Companies not fitting that criteria were given the opportunity to apply for one of an extra four randomized slots.

Kanna was one of those four companies chosen by lottery, and the licensed dispensary is gearing up to open by the end of the quarter, just as the Acreage acquisition deal is expected to close.

Acreage’s Chief Executive Officer Kevin Murphy had this to say about the deal’s announcement:

I could not be more excited about our first dispensary operation in California, especially one in a limited competitive market. While this is our first, it is nowhere near our last, as we expect to significantly expand our dispensary footprint in the state over the coming months.  

Aside from recent store openings and the pending Kanna acquisition, Acreage made headlines back in January when the company’s medical marijuana ad was rejected by CBS for a spot during the Super Bowl.

Yesterday, Acreage released the company’s fourth quarter and full year 2018 financial details. You can find our full breakdown of that info revenue and loss info over here.

The company’s CEO and founder will additionally speak at a South By Southwest panel in Austin, Texas tomorrow that will feature former Republican Speaker of the House John Boehner and CNBC market strategist Tim Seymour.

Acreage currently directly owns assets or manages cannabis services in 19 states across the U.S. and provides cannabis products directly through The Botanist-branded retail storefronts.