Cannabis Companies Go On Buying Spree

This week has been unusually active as cannabis companies have been on a major buying spree.

Schwazze

Schwazze, which used to be known as Medicine Man Technologies Inc. (OTCQX: SHWZ)  closed on the asset purchase of the five Star Buds dispensaries located in Colorado that it had not already previously bought. The acquired dispensaries are located in Aurora (2), Denver, Louisville, and Westminster. The company paid roughly $72.3 million, consisting of $27.5 million in cash, $26.9 million in sellers’ notes, and $17.9 million in Preferred Stock (at a price of $1,000 per share). Schwazze now owns and operates all 13 Star Buds locations in Colorado and its retail footprint now includes 17 dispensary locations in the Denver metro and southern Colorado region.

For 2020, the 13 Star Buds retail dispensaries generated total revenue of approximately $70 million and net income in the range of approximately 40% of revenue. Together with Schwazze and the proforma revenue for 2020 Mesa Organics Ltd, acquired by Schwazze in April 2020, total 2020 proforma revenue is estimated to be approximately $95 million on a combined basis.

Greenlane

Greenlane Holdings, Inc. (Nasdaq: GNLN) has bought the specialty silicone smoking accessory company Eyce for an undisclosed amount. The company said that the acquisition is expected to be immediately accretive to Greenlane’s revenue and earnings.

“Eyce is the definitive leader in premium silicone smoking products and a trusted Greenlane partner for more than seven years. We are very excited to welcome them as the newest addition to our in-house family of brands,” said Aaron LoCascio, Co-Founder and CEO of Greenlane. “Eyce’s premium products and innovative designs set them apart and we are thrilled to be working with the highly experienced and talented Eyce team to accelerate growth in the Greenlane brands portfolio.”

Mr. LoCascio continued, “The Eyce acquisition represents the latest step in Greenlane’s relentless focus to find and acquire the highest quality brands and platform extensions in the cannabis market to further drive our revenue growth and profitability and deliver value to our shareholders. We have carefully built a robust pipeline of targets and we intend to add additional brands to our portfolio in the near term as we continue to execute on this growth plan.”

Charlie Hoch, CEO of Eyce, added, “Greenlane has been an incredible partner over the years and their platform has been instrumental in enabling us to rapidly launch products into the market and build scale. We are thrilled to be joining the team and continuing to work together to accelerate development of the innovative products our customers demand.”

Terra Tech

Terra Tech Corp. (OTCQX: TRTC) said it was buying cannabis company  UMBRLA, Inc., which was recently rebranded as Unrivaled for an undisclosed amount. Unrivaled is a swiftly growing and well-run diversified cannabis company comprised of several highly recognized cannabis brands complemented by distribution, manufacturing, and dispensary operations. Unrivaled brands include Korova, a top ten cannabis brand in California, among a strong portfolio across categories and price points.

Terra Tech’s CEO, Frank Knuettel II, said, “We are very pleased to have entered into this mutually beneficial transaction which leads to immediate scale, driven by strong brands and revenue growth. Unrivaled has grown markedly since inception, led by a strong management team, including Dallas Imbimbo, co-founder of KushCo Holdings, Inc. (OTCQX: KSHB) and Unrivaled. We intend to integrate Unrivaled’s management team into Terra Tech, whose robust leadership is capable of executing on high revenue growth and additional accretive acquisitions.”

Unrivaled operates manufacturing and distribution operations in both California and Oregon and dispensaries in California. Unrivaled owns and manages one of the largest distribution networks on the west coast with over 700 in-network dispensaries throughout Oregon and California, into which Unrivaled sells both its own brands and third-party brands across all major categories: flower products, vape cartridges, extracts, and edibles.

Knuettel added, “Following the restructuring of our balance sheet and bringing in new capital in January, this is the first of our anticipated strategic acquisitions building on the foundation formed by my predecessors. Our short-term goal is to become the premier West Coast and Southwest operator of cannabis assets with a focus on brands and dispensaries. Based on our growth trajectories and new operations coming online during 2021, we believe that the combined companies will generate revenues in excess of $70 million in 2021.”

Unrivaled CEO Dallas Imbimbo said, “Over the last two years Unrivaled has brought together some of the most well-respected brands in cannabis with Korova, LTRMN, Sticks, Cabana and The Spot. Terra Tech’s retail and cultivation assets perfectly complement Unrivaled’s modern brand portfolio, sophisticated R&D and state-of-the-art tech stack. Our mission continues to become the leading-edge global cannabis operator, and this merger will accelerate that path significantly. We would like to give a huge thank you to the Unrivaled team for their dedication and relentless pursuit of our goals.”

 

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