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Golden Leaf Holdings Announces Acquisition of Combined Cultivation, Production and Retail License in California
PORTLAND, Ore., Aug. 17, 2018 (GLOBE NEWSWIRE) -- Golden Leaf Holdings Ltd. (“GLH” or the “Company”) (CSE:GLH) (OTCQB:GLDFF), a cannabis company with cultivation, production and retail operations built around recognized brands, announced that on August 16, 2018, it signed a definitive agreement (the “Agreement”) to acquire a combined cultivation, production and retail license in Northern California, dubbed a “Sweet 16” license. It is one of only 16 licenses of its kind issued by the City of San Jose that allows the holder to operate in a vertically integrated fashion.
“We are excited to introduce our brands and competencies to the 5th largest economy in the world. This is a natural progression given that we operate in the neighboring states of Oregon and Nevada. As part of an announcement we made August 13, 2018, we launched into the California market with our signing of the definitive agreement to purchase the assets of Tahoe Hydroponics Company, LLC and 11T Corp., which involves the acquisition of a ~28,800 ft2 facility under development in Sacramento, California. Adding production and retail licenses complements our entry into California in a meaningful way. The approval of this single, multi-faceted license is expected to swiftly position us for this market. In anticipation of this development, my team has been working diligently on a wholesale and retail deployment plan, supported by investments in production and supply chain that we expect will generate revenues in a relatively short period of time from the date of closing,” said William Simpson, CEO of Golden Leaf.
Following closing, Golden Leaf will lease the seller’s facility to produce and distribute its branded products to 3rd party dispensaries and other wholesale sales channels in the State of California, as well as retrofit the section of the facility that currently operates as a retail outlet, into another branded, Chalice Farms store. The production facility will support additional Chalice Farms retail locations that may be opened in California in the future, aligning with the Company’s go-to-market strategy.
Mr. Simpson added, “California’s ‘seed-to-sale’ tracking requirements impact the supply chain of every licensed cannabis operation in the state. The tracking system “Metrc” being mandated by California is one that Golden Leaf already uses in Oregon and is fully conversant with. While other licensees come up to speed with how to implement this system, we will leverage our existing tried-and-tested standard operating procedures seamlessly.”
Under the terms of the Contingent Asset Purchase Agreement, upon closing Golden Leaf will acquire the multi-use “Sweet 16” license, as well as certain assets of the seller including cash, inventory, equipment and contractual rights for US$7,146,582, consisting of US$1.25M in cash at closing and US$500,000 of GLH stock based on the VWAP for the 30-days immediately preceding the closing date. The balance of the purchase price of US$5,396,582 is cash earn-out consideration to be paid over time based upon the net wholesale and net retail revenues generated from the Company’s San Jose facility. The lease is at market rates and the initial term of the lease agreement is for a period of five years. Closing of the transaction is subject to customary contingencies, including licensing approvals.
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About Golden Leaf Holdings
Golden Leaf Holdings Ltd. is a Canadian company operating in multiple jurisdictions, including Canada, Oregon, Nevada, and California, with cultivation, production and retail operations built around recognized brands. Golden Leaf distributes its products through its branded Chalice Farms retail dispensaries, as well as through third party dispensaries. Golden Leaf’s cannabis retail operations and products are designed with the customer in mind, focused on superlative in-store experience and quality products. Visit http://goldenleafholdings.com/ to learn more.
KCSA Strategic Communications
Chief Executive Officer
Golden Leaf Holdings Ltd.
Disclaimer: This press release contains "forward-looking information" within the meaning of applicable securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the Company’s future business operation, expectations of gross sales, expectation of revenues within a short time of closing, the opinions or beliefs of management and future business goals. Generally, forward looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to general business, economic and competitive uncertainties, regulatory risks including risks related to the expected timing of the Company’s participation in the Adult Use market, market risks, risks inherent in manufacturing operations and other risks of the cannabis industry. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking information. Forward-looking information is provided herein for the purpose of presenting information about management’s current expectations relating to the future and readers are cautioned that such information may not be appropriate for other purpose. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws. This Release does not constitute an offer of securities for sale in the United States, and such securities may not be offered or sold in the United States absent registration or an exemption from registration or an exemption from registration.
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