Planet 13 Holdings Inc. (CSE: PLTH)(OTCQX: PLNHF) is buying Next Green Wave Holdings Inc. (CSE: NGW)(OTCQX: NXGWF) in a deal valued at approximately C$91 million ($70 million). Planet 13 is paying a premium of 44% to the shareholders based on the company’s average share price over the last ten days.
Next Green Wave is an integrated premium seed-to-shelf craft cannabis producer offering products through its in-house brand portfolio and wholesale flower for other large cannabis manufacturers. The company owns and operates a 35,000 sq. ft. indoor facility in Coalinga, CA, which is home to its nursery, cultivation, distribution, and future packaging business. Planet 13 said it plans on keeping the company’s management team.
“Today’s announcement is an extension of the strategy we’ve laid out for investors of adding cultivation and production in California to vertically integrate and bring our highly popular brands into the state. We are methodically expanding our footprint to drive topline growth and improved profitability,” said Bob Groesbeck, Co-CEO and Co-founder of Planet 13. “We’ve been incredibly impressed by the Next Green Wave team and their ability to generate revenue and Adjusted EBITDA based on the quality of their cultivation and manufacturing in this very competitive market.”
Planet 13 said that the deal is expected to be immediately accretive to 2021 and 2022 EBITDA. The company also said that the structure provides meaningful price protection against market volatility in Planet 13’s share price up to the completion of the transaction. In addition to that Planet 13 said that NGW’s operations will serve as the backbone of its continued focus on the California market. NGW will enable Planet 13 to introduce its diverse brand portfolio of exotic, pheno-hunted cultivars to the Santa Ana SuperStore as well as across the state.
“This is an exciting day for Next Green Wave shareholders. Planet 13 has proven its ability to run incredibly productive retail locations and create manufactured products that command a significant share of sales in their home state of Nevada,” said Mike Jennings, CEO of Next Green Wave. “They are a perfect fit for Next Green Wave, and being a part of their attractive growth profile and expansion in Illinois and Florida is the correct next step for NGW.”
For their part, NGW shareholders will immediately benefit from the enhanced size, scale and liquidity of Planet 13’s capital markets presence. NGW Shareholders will participate fully in the upside of Planet 13’s upcoming expansions into Illinois and Florida.