Cannabis One Holdings has executed three definitive agreements to acquire certain assets of Nevada-based LV 3480 Partners LLC, 3480 Investors, Inc., and Agro Finance LLC (Collectively, "Evergreen Organix").
In connection with the Definitive Agreements, Cannabis One will acquire Nevada State-issued cannabis cultivation & manufacturing licenses, held by NV 3480 Partners LLC and 3480 Hacienda Partners LLC, respectively, and related infrastructure, subject to the approval of Nevada State regulators, in addition to the popular flower brand "Fleur" and the cannabis-infused product brands, "Evergreen Organix" and "EG.O", among others.
According to the company, following the closing of the transaction contemplated in the definitive agreements, the Company anticipates that the acquisition of Evergreen Organix will:
- establish Cannabis One with a significant brand presence in the Nevada recreational and medical marketplace, with an Evergreen Organix management-estimated retail penetration level for its brands in approximately 93.0% of Nevada State-licensed dispensary locations;
- provide, through its newly-acquired Nevada Cannabis Licenses, more than 27,000 ft2 of additional cultivation capacity to the Company, with another 6,000 ft2 of active manufacturing space, facilitating the throughput of CBIS' growing brand portfolio, which would now include: INDVR, INDVR Fire, INDVR Strains, Honu, Fat Face Farms, Fleur, Evergreen Organix, and EG.O – while also allowing for the manufacture of the Flav, West Edison, and Cheech's Private StashTM licensed branded product lines;
- generate an Evergreen Organix management-estimated, annualized US$15.0 million in annual system-wide brand revenue through the Evergreen Organix channel, during fiscal 2019, with an estimated EBITDA margin of between 23.0% and 30.0%, assuming: the continued operating performance of Evergreen Organix's cultivation and manufacturing operations; the successful launch of new products in Evergreen Organix's home state of Nevada; the continued expansion of Evergreen Organix's licensed product lines in both Nevada and legal, out-of-state jurisdictions; and a return to trend for Nevada cannabis industry participants, following an acute period of competitive, yet – in the opinion of Evergreen Organix – unsustainable pricing practices; and
- further Cannabis One's vision to become a true multi-state operator ("MSO") for the manufacturing, distribution, and retail penetration of its proprietary brands and formulations – which the Company believes represent only the highest level of consumer appeal and market reach – while also securing additional long-term reciprocal manufacturing and distribution relationships in California, Washington, Oregon, and Montana.
"Under the terms of the Definitive Agreement with LV 3480 Partners LLC, the Company, through its wholly-owned subsidiary, will acquire all intellectual property, product formulations, warehousing and logistics operations, and multi-state intellectual property licensing and manufacturing agreements with contracted partners," the company explains. The company continues explaining that gross consideration payable upon Closing to LV 3480 Partners LLC in connection with the transaction will be US$24,607,506, less any funds previously advanced by Cannabis One or its wholly-owned subsidiary to LV 3480 Partners LLC, in Class B Super Voting Shares of Cannabis One at a per CBIS Share price equal to ten (10) times (given that each CBIS Share is convertible into ten (10) Class A Subordinated Voting Shares of Cannabis One (the "Class A Shares")) the greater of: (a) the maximum discount allowed under the policies of the Canadian Securities Exchange (the "CSE") of the closing price of the Class A Shares immediately prior to the date of execution of the Definitive Agreement with announcement of the same by Cannabis One; and (b) the ten (10) day volume-weighted average price of the Class A Shares for the period immediately preceding the Closing, converted into United States Dollars using a ten (10) day simple average of the USD:CAD Noon exchange rate for the period immediately preceding the Closing.
Under the terms of the Definitive Agreement with 3480 Investors, Inc., the Company, through its wholly-owned subsidiary, will acquire two (2) State of Nevada-issued licenses pertaining to the cultivation and manufacture of cannabis and cannabis-related products, subject to the approval of Nevada State regulators. Gross consideration payable upon Closing to 3480 Investors, Inc. in connection with the transaction will be US$15,000,000, comprised of US$14,355,000 in assumed liabilities and US$645,000 in cash.
Under the terms of the Definitive Agreement with Agro Finance LLC, the Company, through its wholly-owned subsidiary, will acquire all cultivation and manufacturing equipment used in the production of the Evergreen Organix, EG.O, Fleur, Honu, INDVR, INDVR Fire, INDVR Strains, Cheech's Private StashTM, and Flav brands in the State of Nevada, in addition to the assumption of all financing and leasing activities to which Agro Finance LLC is currently engaged. Gross consideration payable upon Closing to Agro Finance LLC in connection with the transaction will be US$8,103,117 in cash.
Finally, the company points out that "The closing of the transaction contemplated in the Definitive Agreements is subject to receiving all necessary governmental and regulatory approval, including, but not limited to the approval of a transfer of ownership by the Nevada Department of Taxation and the Clark County Department of Business Licenses. Further, it is the intention of the parties to effect the Closing of the Definitive Agreements concurrently."
For more information:
Cannabis One Holdings
821 22nd St.,
Denver, CO 80205
Tel: 1-720-399-0599
[email protected]
cannabisone.life