Schwazze Archives - Green Market Report

StaffFebruary 10, 2022
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Schwazze,(OTCQX: SHWZ) has closed the transaction to acquire Colorado-based MCG, LLC also known as Emerald Fields.  Emerald Fields is the owner and operator of two retail cannabis dispensaries, located in Manitou Springs and Glendale, Colorado.  This acquisition is part of the company’s ongoing retail expansion plan in Colorado and New Mexico, bringing the total number of dispensaries the Company operates to 32.

Total consideration for the acquisition is $29 million and will be paid as 60% cash and 40% Schwazze common stock upon closing.  This is an estimated 3.8 multiple on 2021 Adjusted EBITDA.

“Our team is delighted to add the Emerald Fields Cannaboutiques to our growing portfolio of dispensaries and are eager to welcome the team to Schwazze. Manitou Springs and Glendale are attractive locations and valuable assets to our overall growth plan as we continue to build out Colorado.  Our team is excited to add another store brand to our house of brands.”  said Justin Dye, Schwazze’s CEO.

High Tide

High Tide Inc. (Nasdaq: HITI) has completed its acquisition of Bud Room Inc. as well as assignments of the vendors’ shareholder loans, for C$3.6 million and acquired all rights to the customized Fastendr retail kiosk and smart locker technology and Bud Room’s retail cannabis store located in Ottawa, Ontario.

The company said in a statement that the acquisition will provide the following elements:

  • High Tide through this acquisition gains ownership of the Fastendr technology which will improve the Company’s competitive advantage in bricks-and mortar cannabis retail.
  • A pilot conducted at Bud Room’s Ottawa location found that over 60% of customers preferred to use the Fastendr™ kiosks and spent over 20% more when doing so.
  • All existing and future Canna Cabana locations will be equipped with this customized and innovative kiosk and smart locker technology as it delivers a faster customer experience in busier retail locations while also enabling the efficient operation of smaller footprint stores.
  • High Tide intends to license this technology to third party retailers starting with the cannabis industry, and expanding to other retail sectors across North America and beyond.
  • This technology provides High Tide with potential new revenue generation, data collection and monetization opportunities from third party retail locations, and will further enhance the value of its Cabannalytics data insights offering.

Bud Room’s founder and Chief Executive Officer, Michael DiDuca will remain engaged with the High Tide team assisting in launching Fastendr. High Tide granted 13,538 stock options to DiDuca exercisable at C$6.25 per High Tide Share for a period of 3 years.


StaffMarch 4, 2021
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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.”

 


StaffOctober 1, 2020
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MedPharm Holdings said it would not be extending their term sheet, which expired yesterday, for acquisition with Schwazze, Inc. (SHWZ), formerly operating as Medicine Man Technologies. This is the second company in two months to walk away from Schwazze as Medicine Man Denver also chose to part ways in August.

“After more than a year and a half of negotiations we have mutually agreed with Schwazze, this transaction no longer serves either party,” said Albert Gutierrez, CEO of MedPharm “We remain as optimistic as ever about MedPharm’s future and our ability to bring groundbreaking research that is enhanced by novel, cannabinoid-containing dosage forms,” Gutierrez says. “I felt it was a good time to move on and seek other qualified partners for investment purposes, as MedPharm retains its role as a leader in the industry.”

MedPharm said it is well-positioned in the industry after experiencing a series of historical business developments since its inception in 2017. In August of 2019, the Drug Enforcement Administration (DEA) announced that MedPharm Research, a wholly-owned subsidiary of MedPharm Holdings, was selected to move forward as one of the first applicants to be considered for a license to grow federally legal cannabis under a new policy statement issued in the Federal Register. The Bulk Manufacturer license will allow MedPharm to provide cannabis and cannabis dosage forms for research purposes.

Justin Dye, Chairman and Chief Executive Officer of Schwazze said, “The decision to terminate the binding term sheet with MedPharm is the right step forward for Schwazze. We are committed to creating shareholder value and generating compelling investment returns and believe that by staying true to our core business strategy of building a vertically integrated platform, we will do just that. Our focus remains unchanged, as our intention is to bring together profitable cannabis operators while growing organically to create a robust, differentiated and most admired cannabis company.”

Schwazze instead has acquired Mesa Organics, a dispensary chain with four locations in Southern Colorado, Purplebee’s a leading extraction and manufacturing business, and remains on track to acquire the 14 Colorado locations of Star Buds which includes 13 retail locations and a cultivation facility. The company said it remains in negotiations with the announced acquisitions Roots Rx and Canyon Cultivation.


Debra BorchardtJune 8, 2020
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Schwazze(OTCQX: SHWZ) formerly known as Medicine Man Technologies is buying 14 Star Buds locations in the state of Colorado as part of the company’s pending acquisitions. The deal is valued at $118 million and the locations are said to have earned $50 in annual revenue.

Medicine Man had originally announced in September 2019 that it was buying five stores from Star Buds for just over $31 million in cash and stock. Schwazze was able to make the acquisition as a result of the passage of new legislation in Colorado, HB-1090. This allowed a publicly-traded company from outside the state to operate a plant touching business and to acquire a Colorado cannabis operator.

“Star Buds is a premier brand across the entire cannabis industry, and we are thrilled to bring the Colorado locations into the Schwazze family,” said Justin Dye, Chief Executive Officer of Schwazze. “Led by Brian Ruden, TJ Joudeh and their partners, Star Buds has built a respected, innovative, and trusted retail operations. I admire their commitment to high-quality products and paired with budtenders’ deep expertise and laser focus of taking care of their customers – it is a recipe for success. The addition of the Star Buds builds on our customer-centric focus and will significantly expand our retail operations footprint while also increasing return to shareholders.”

Star Buds was founded in 2013 and has 13 retail operations located throughout the Colorado front-range with four dispensaries in Denver, two dispensaries in Aurora, one dispensary in each of Commerce City, Westminster, Louisville, Longmont, Niwot, Pueblo and Pueblo West, and one cultivation in Denver.

The company said in a statement that the acquisition of the 14 Star Buds locations is represented by 13 different ownership groups and agreements. The Company has submitted a change of ownership applications with the Colorado Marijuana Enforcement Division for the 14 Star Buds locations and the transactions are expected to close in the third quarter of 2020.

“We are excited for the Colorado Star Buds locations to join the Schwazze portfolio,” said Brian Ruden, Star Buds owner, operator, and Schwazze Board Member. “The strategy Schwazze has outlined provides exciting opportunities for our employees, customers, and the industry. These transactions further Schwazze’s vision to create the most admired cannabis company in the world while remaining focused on customer experience, trusted branding, and strong profitability. We are proud of what Star Buds has built in Colorado and eagerly look forward to what the future holds with Schwazze.”

Star Buds operates 20 cannabis retail stores in Colorado, Oklahoma and Maryland. The company also produces brands including Kaviar concentrates and Stars Bars edibles.

 

 


Debra BorchardtApril 21, 2020
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Medicine Man Technologies Inc. (OTCQX: MDCL) has switched its name to Schwazze (pronounced SHHwahZZ). The company said the new branding reflects its goal to create a dynamic, innovative culture and brand identity while supporting the current and future house of brands as Schwazze continues to grow. Effective, Tuesday, April 21 the Company will begin trading under the Schwazze name and OTC ticker symbol SHWZ.

The company said that Schwazze originates from its proprietary cultivation technique from the Three A Light methodology, which stimulates plant growth and health. The new corporate brand Schwazze inspires a call to action to innovate, grow and nurture plants, products, experiences, and environment to benefit the human experience.

“We are excited to bring this new brand to life to further realize our vision of becoming the most admired cannabis company by positively impacting the health, well-being, and happiness of our customers, team members and communities,” said Shane Sampson, Chief Marketing and Merchandising Officer of Schwazze. “Last year the Company set out to make major changes within the Colorado cannabis industry with Colorado House Bill 19-1090. Our new brand, Schwazze enables differentiation as a true leader across all facets of cannabis and marks the next stage of our strategic growth. After finalizing the announced acquisitions, Schwazze will be one of the largest vertically integrated cannabis operators from seed to sale. We are proud to be building a great cannabis company at Schwazze.”

Mesa Organics Purchase

The company also said that it completed its acquisition of Mesa Organics and its Purplebee’s business.

The closing of Mesa Organics represents the first of the company’s previously announced pending acquisition it has entered into in Colorado with established and proven cannabis companies. The company set these acquisitions in motion after a Colorado law change, House Bill 19-1090, allowed for public-company ownership—a law the company’s leadership lobbied on behalf of for years. After finalizing these acquisitions, Schwazze will be one of the largest vertically integrated cannabis operators. Upon the completion of its announced acquisitions, the Company’s portfolio will consist of top-tier licensed brands spanning cultivation, extraction, infused-product manufacturing, dispensary operations, and robust product innovation and development all under one entity.

Mesa Organics operates four dispensaries throughout southern Colorado in Pueblo, Ordway, Rocky Ford, and Las Animas. Purplebee’s is a leading pure CO2 and ethanol extractor and manufacturer, as well as a producer of cannabis products for some of the leading edible companies across the state.

 


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