Green Growth Brands Buying Moxie For $310 Million In All Stock Deal

Cannabis retailer Green Growth Brands Inc. (CSE: GGB)(OTCQB: GGBXF) is acquiring MXY Holdings LLC also known as Moxie in an all-stock deal valued at $310 million. The deal is expected to close within six months.

Moxie

Moxie is located in three states at this time, California, Nevada, and Pennsylvania. Michigan is set to be the fourth state. The products are in 250 dispensaries, which is a retail relationship that GGB would like to leverage.  Moxie provides customers with high-quality recreational and medical cannabis products.  Moxie offers live resin vape cartridges, CBD vape cartridges, liquid Moxie vape cartridges, and pre-rolled joints.

Green Growth said that the combination of Moxie and GGB would create one of the first cannabis companies to provide consumers a comprehensive product offering, including both CBD and tetrahydrocannabinol (THC) product lines and distribution that run from mainstream retail to cannabis dispensaries, all led by management with decades of expertise and credibility.

“In the short time since we began operations, we have built a business comprised of highly experienced management and merchant teams and cannabis experts, who have created successful CBD and MSO businesses. The coming together of Moxie and Green Growth Brands is anticipated to complete the circle,” said Peter Horvath, CEO of Green Growth Brands.  “As a ‘360 degree’ cannabis company, we expect to bring an expertise to each segment of the combined business: cannabis dispensaries, vertically-integrated and wholesale CBD and wholesale cannabis consumer products.”

Terms

A new Ontario limited partnership will be formed and GGB will be the general partner who will acquire the operating companies of GGB and the issued and outstanding units of Moxie, an arm’s length third party, in an all-equity interest transaction.  As part of the deal, GGB will also be directly acquiring shares of MXY C, INC. and MXY D, INC. Delaware entities within the Moxie structure, and interests in two entities, PurePenn LLC and Pure CA, LLC, with which Moxie has current acquisition agreements.

If Moxie terminates the deal, there is a $10 million fee. If GGB terminates the deal, there is a $17.5 million fee.

“The pairing between Moxie and Green Growth Brands is anticipated to accelerate growth for both businesses that results in a differentiated and expansive business model,” said Jordan Lams, Co-Founder and CEO of Moxie. “Moxie’s success comes from keeping our promise of delivering premium quality products to our consumers that creates an emotional connection with Moxie across multiple geographies. Both companies have proven track records of building customer loyalty through authenticity, and together, we are going to focus on taking steps to rapidly grow America’s mainstream cannabis brands.”

Green Growth’s Growth Plans

The Moxie acquisition is part of GGB’s focused growth strategy.  GGB is rapidly building its cannabidiol (CBD) business, including recently securing additional distribution through Designer Brands Inc., the parent company of DSW shoe stores (NYSE: DBI) and Abercrombie & Fitch Co. (NYSE: ANF), and is expanding its footprint of Seventh Sense Botanical Therapy shops from the current 61 to an expected 200+ by the end of calendar year 2019.  GGB is also building its MSO network, which now includes the potential for up to 47 dispensary licenses in three key states.

Moxie is recognized by its peers in cannabis, winning close to 100 industry awards over the years, including Brand of the Year at the 2018 California Cannabis Association Awards. Moxie’s newest product, the DART vaporizer, won first place at the recent 2019 High Times SoCal Cannabis Cup with its Piña Colada flavor. Jordan Lams was named 100 Most Influential People In Cannabis by High Times two years running,

Debra Borchardt

Debra BorchardtDebra Borchardt

Debra Borchardt is the CEO, Co-Founder, and Editor-In-Chief of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Masters degree in Business Journalism from New York University.


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