TPCO Holding Corp. also known as The Parent Company (OTCQX: GRAMF) is buying a West Hollywood, CA dispensary named Calma West Hollywood in a deal valued at $11.5 million. It is expected to close in the third quarter of 2021. The transaction is made up of $8.5 million in cash and $3.0 million in shares of The Parent Company.
Calma is located in the Los Angeles metropolitan area, with a population of approximately 18.7 million people and a cannabis retailer density of approximately one store for every 194k people in the region. The 3,250 square foot dispensary is one of only ten stores in the West Hollywood area that is licensed for both delivery and storefront retail.
“We are thrilled to be expanding our retail presence in the iconic West Hollywood region and look forward to continuing to provide our clients with the exceptional selection and retail experiences they’ve come to expect from us,” said Steve Allan, Chief Executive Officer of The Parent Company. “Strategically positioned in a high-traffic, high-population region of Los Angeles, this acquisition enables us to expand our reach to a broader potential audience of consumers and patients with both in-person retail and delivery options.”
TPCO said in a statement that with more than 3.6 million visitors per year, West Hollywood is situated in the core of the Los Angeles region, surrounded by cultural destinations and tourist attractions in every direction. The acquisition of Calma increases its current California retail footprint to four, with two operating locations in San Jose and one in Bellflower. To ensure Calma remains a staple in West Hollywood, the Calma founders will remain involved with the operations of the business. The deal remains subject to regulatory approvals, including approval by the City of West Hollywood.
85% of the equity of Calma will be obtained by TPCO upon approval by the City of West Hollywood. The transfer of the remaining 15% equity of Calma is expected to occur in 2022. Closing of the Calma transaction is subject to standard closing conditions as well as regulatory review and approval.
“The Calma team is thrilled for the next phase of its growth as part of The Parent Company,” said Cobby Pourtavosi, Founder of Calma. “The Parent Company shares our relentless belief in prioritizing consumer experience and will be a contributing member of the West Hollywood community for years to come.”
Mr. Allan added, “As we continue to execute on our omnichannel expansion strategy, we will look to evaluate and identify additional strong retail and delivery operators in strategic locations to expand our reach across the state.”