Red White & Bloom Acquires Florida Operations from Acreage Holdings
-Florida has one of the most robust medical markets in the US with cannabis revenue of over US$1.2 billion in 20201-
-Limited License State with 22 licensed operators, of which only 16 are selling product in the state –
-Acquisition includes 8 leased locations and ownership of 113,000 square feet facility for cultivation and processing situated on 15 acres of land-
-Once closed, and coupled with current pending acqusitions2, RWB will be operating in, or have brands available in, 6 of the top 10 states in the US measured by cannabis revenue with sales in 2020 exceeding $8.8B.1 -
TORONTO, Ontario, February 25, 2021 (GLOBE NEWSWIRE) -- Red White & Bloom Brands Inc. (http://www.redwhitebloom.com/) (CSE: RWB) (OTC: RWBYF) (“RWB” or the “Company”), today announced that it has entered into a definitive agreement with HSCP, LLC (the seller” a subsidiary of Acreage Holdings Inc. (“Acreage”) (CSE: ACRG.A.U, ACRG.B.U) (OTCQX: ACRDF, ACRHF), pursuant to which a newly incorporated subsidiary of the Company, RWB Florida LLC will purchase all of the issued and outstanding shares of common stock of Acreage Florida, Inc. (“Acreage Florida”) from the Seller. The Company will also acquire certain owned and leased real estate assets used in Acreage Florida’s operations
Acreage Florida is licensed to operate medical marijuana dispensaries, a processing facility, and a cultivation facility in the state of Florida. The deal also includes the sale of property in Sanderson, Florida that includes over 15 acres of land and has an 113,546 SF facility for cultivation and a 4,360 SF freestanding administrative office building. In addition, Acreage Florida has 8 leased stores in prime locations throughout the state.
RWB intends to immediately introduce its award winning Platinum Vape (https://houseofplatinum.com/) brands as well as leverage the previously announced (https://ir.redwhitebloom.com/news-events/press-releases/detail/43/red-white-bloom-brands-closes-agreement-with-high-times)rights to High Times® branded products at both the RWB store level and throughout the State of Florida following the closing of this acquisition.
Brad Rogers, Chief Executive Officer of RWB, stated “Our core strategy has always been to focus on a limited number of markets within which to operate at scale, and Florida has always been one of those targeted markets. Today we have our path to entry into the third largest market by revenue in the US and are excited with what we can do with the brands we have amassed as well as the skill to execute on our vision.”
When coupled with the Company’s recently announced acquisition in Illinois, this transaction further expands the Company’s representation in States with limited
cannabis licenses. Upon closing of existing definitive agreements, RWB will have a presence through licensed operations and/or the licensing of its brands in 6 States.
Aggregate Purchase Price: US $60,000,000 in cash, stock, and other cash considerations including:
·An up-front cash payment of US$5,000,000 upon execution of the definitive agreement
·An additional US $20,000,000 in cash, US $7,000,000 in the Company’s common stock (subject to certain sale restrictions and voluntary leak outs), and US $28,000,000 in vendor take back promissory notes (comprised of a US $10,000,000 7 month note and a US $18,000,000 13 month note) upon closing the transaction.
The transaction is subject to a number of closing conditions that are customary with a transaction of this nature, including regulatory approvals and approval of the CSE. RWB anticipates closing the transaction during the second quarter of 2021. There is a finder’s fee payable to an arm’s length party at closing. Additional details shall be provided at closing and in the Company’s filings on Sedar.
1 Source: Leafly (https://leafly-cms-production.imgix.net/wp-content/uploads/2021/02/13180206/Leafly-JobsReport-2021-v14.pdf)
2 Based on previously announced definitive agreements to acquire operating cannabis assets in Illinois and launch of Platinum Vape in Arizona. States with Brands: Michigan, Oklahoma, Arizona. States operating including pending acquisitions: California, Illinois & Florida
About Red White & Bloom Brands Inc.
The Company is positioning itself to be one of the top three multi-state cannabis operators active in the U.S. legal cannabis and hemp sector. RWB is predominantly focusing its investments on the major US markets, including Florida, Illinois, California, Michigan, Oklahoma and Arizona with respect to cannabis, and the US and internationally for hemp-based CBD products.
For more information about Red White & Bloom Brands Inc., please contact:
Tyler Troup, Managing Director
Circadian Group IR
Visit us on the web: www.RedWhiteBloom.com
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