SLANG Worldwide Inc. (OTCQB: SLGWF) is buying Colorado-licensed cannabis cultivator Pleasant Valley Ranch, LLC as the company makes another move to own its supply chain. Pleasant Valley has been a key supplier of raw materials for SLANG-branded concentrate and edibles products in Colorado. By buying the supplier, Slang can assure itself of having the raw materials it needs at a lower cost, which will improve the gross margins.
The company didn’t disclose the price paid for Pleasant Valley but did say that it was for a non-material amount of cash and common shares. The deal is expected to close in the fourth quarter of 2020.
“The purchase of Pleasant Valley is another key step in our strategy to assemble a fully integrated, wholesale operation in our core market of Colorado,” said SLANG President & CEO Chris Driessen. “The Colorado market continues to generate double-digit growth, and this transaction will help us capture additional market share. The acquisition of a trusted supplier will help us continue to expand our production volumes while improving our unit economics and maintaining our high standards of quality.”
Pleasant Valley is a privately-owned company located in Carbondale, CO specializing in high-quality, organically grown cannabis strains that thrive in high altitude, mountainous environments. The release stated that Pleasant Valley has 1,600 square feet of greenhouse cultivation area, and a five-acre outdoor facility at an elevation of approximately 7,500 feet that produces an authentic, naturally cultivated product using snowmelt water. It currently has a capacity of 3,600 plants and produces approximately 4,800 pounds annually and is projected to double its capacity by 2021.
This is the latest step taken by Slang as it moves to consolidate its supply chain. Last month, the company bought Peoria Partners, a state-licensed manufacturer, and distributor of Slang’s District Edibles brand in Colorado.
“This is one of the planned acquisitions that allow us to consolidate our supply chain in Colorado,” said SLANG President & CEO Chris Driessen. “Owning a licensed cannabis facility capable of manufacturing and distributing cannabis-infused SLANG products immediately opens up new opportunities for us, including the ability to capture greater top-line revenue and more favorable unit economics.”
Slang said it was looking at other potential acquisitions and opportunities in Colorado.