General Cannabis to create a retail presence through the purchase of wooden dispensaries
- Upon completion of the transaction, it will add two retail centers in Colorado and three in Oregon, build an experienced retail team and achieve vertical integration in Colorado.
- After closing, consolidated sales are expected to triple. The company expects to achieve positive cash flow as all outlets are open and have ramp access.
- The total cost of the transaction is $39.5 million, of which 13% will be paid in cash and 87% in stock.
- General Cannabis is extending its convertible debenture to fund the money needed for the closing.
- General Cannabis will change its name to Trees.
DENVER, 21. April 2021. (GLOBE NEWSWIRE) – General Cannabis Corp (OTCQB:CANN) today announced a definitive agreement to acquire Trees, a leading operator of retail cannabis stores with dispensaries in Colorado and Oregon. The transaction, which is subject to regulatory approval, will provide the company with a fundamental retail platform for growth.
The deal is the latest step for Colorado-based General Cannabis, whose strategy is to identify, acquire and operate licensed cannabis businesses in mature markets. Last year, General Cannabis became one of the first publicly traded companies to receive approval from the Colorado Division of Marijuana Enforcement to acquire licensed cannabis assets, acquired and integrated Seven Fifth Farm (a 17,000 square foot flying greenhouse outside of Boulder, Colorado), strengthened its board of directors and management, and completed a series of capital transactions that strengthened its balance sheet and added working and growth capital. In addition to SevenFive Farm, the company operates Next Big Crop, a subsidiary that provides design, consulting and operations services for cannabis cultivation facilities across the country. Total general cannabis revenues nearly doubled in 2020 compared to 2019.
Trees currently has one pharmacy in Denver, Colorado, and two pharmacies in Portland, Oregon. Sales at the three existing stores were approximately $18 million in 2020. The Trees plan to open another clinic in Denver and one in Portland in the coming months, bringing the total number of clinics to five. The addition of the tree footprint provides vertical integration for General Cannabis in Colorado.
Carl Williams, president of General Cannabis, said: This is a transformational acquisition for us. Over the past year, we have strengthened our team and our balance sheet to take advantage of this opportunity. When this transaction is completed, we expect our consolidated revenues to at least triple. We expect cash flow from operations to be positive as stores are opened and expanded. Equally important, we immediately build a retail base and recruit people with extensive retail experience.
Once the transaction is completed, Tree’s management will become a key part of the General Cannabis team. Tim Brown, founder and CEO of Trees, will join General Cannabis’ Board of Directors and will be part of the management team. Trevor Hoffman, co-founder and president of Trees, will also join the management team. General Cannabis will change its name to Trees as soon as possible after the closing, but will keep its share symbol CANN.
Today’s announcement is a major step forward in our alignment strategy. With the acquisition of Trees, we are adding a retail platform that is successful today and will serve as a foundation for future growth. Tim, Trevor and the Trees team brought incredible depth and expertise.
Steve Gutterman, CEO of General Cannabis
They care deeply and passionately about their clients. And the name Tree, which stands for health and growth, nature and natural cannabis – and is followed up with passion – perfectly captures our shared vision.
Total Cannabis will purchase the trees for approximately $39.5 million. Total prize money is $2.5 million, or 2.2 times the proceeds of Trees 2020. Approximately 13% of this amount will be paid in cash over a 24-month period and 87% will be paid in General Cannabis common stock. The Company will issue 38,745,193 shares to Tree shareholders following the closing; the number of shares has been calculated by dividing the share payment by $0.89 per share, the 15-day weighted average share price for the 24 period. March to 14. April.
To pay cash at closing, the Company increased convertible notes by $2.3 million for a total of $6.9 million. In total, the company has raised about $10 million in the past nine months. These funds have been and will continue to be used to strengthen the Company’s balance sheet and provide capital for growth opportunities such as this acquisition.
Trees CEO Tim Brown said: Everything we do, we do for our customers, and without them – and without our amazing employees – we wouldn’t be standing here today. We are excited to be a part of the team because General Cannabis shares our values and vision. This agreement will allow us to grow – in our own way. We look forward to providing more customers with trees and continuing to build a grass growing business with the help of people for people.
About General Cannabis Corp
General Cannabis Corp is a Colorado-based cannabis company with extensive expertise in wholesale, retail and cultivation consulting. The company’s strategy is to deploy cannabis assets in mature markets. The address of the company’s website is www.generalcann.com.
Original press release
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