Australis Capital Inc. (CSE: AUSA) (OTC: AUSAF) entered into an asset purchase agreement with Green Therapeutics, LLC and affiliated companies, to acquire its Tsunami, Provisions, and GT Flowers cannabis brands in a deal valued at $8 million. The deal is expected to close in late 2019.
In addition to the brands, Australis is also buying certain operating assets, intellectual property and the right to assume, complete and expand the construction of a state-of-the-art 55,000 square foot cultivation and production facility in North Las Vegas, Nevada.
Australis said it will issue common stock to complete deal and an additional $800,000 will be issued when the new cultivation and production facility in North Las Vegas is fully licensed and operational and an additional $800,000 in shares will be issued if certain performance goals are reached utilizing the acquired assets within specified timeframes per the definitive agreement.
“Green Therapeutics and Australis’ combined assets, expertise, and network positions our company for tremendous growth and is uniquely positioned with products spanning verticals where long term margins will be insulated,” said Scott Dowty, CEO of Australis. “Introducing Mr. Natural’s Veteran Affairs registered premium organic strains and proprietary cultivation methodologies to Nevada through a purpose-built facility will serve as the launching ground for a nationally recognized cannabis brand.”
In a separate transaction, Australis acquired from Meridian Companies LLC an 8.9-acre parcel of land in North Las Vegas in exchange for $2.93 of its common stock or 3,585,521 Australis common shares where the new cultivation and production facility will be located.
The 8.9-acre parcel of land in North Las Vegas has the potential to support a 400,000 square foot cultivation and production facility which will be built to the industry recognized Aurora Cannabis standard. The acquisition will include GT’s operating team. Australis expects the 55,000 square foot facility will generate approximately $10-12 million in EBITDA in its first full year of operations, respectively, resulting in an adjusted purchase price multiple of approximately 2.0 – 2.3x including the cost of the buildout of the new facility.
“We are excited to be working with Australis’ top tier management team and leveraging their strategic relationship with Aurora Cannabis,” said Dr. Duke Fu, CEO of Green Therapeutics. “This gives us a fantastic opportunity to scale our current brands inside and outside Nevada while maximizing Australis’ portfolio assets and vast cultivation experience.”