- The Highly Accretive Acquisition Strengthens Hollister’s Brand Portfolio While Expanding its Footprint Across Multiple U.S. States
- Venom Extracts Brings With it 2019 EBITDA of $2.5 Million on Revenue of $16.4 Million, Putting Hollister on the Fast Track to Becoming a Cannabis Industry Leader in 2020
- In Addition to Becoming a Leader in the Cannabis Sector, Hollister Biosciences is Diversifying into the Highly Promising World of Psychedelics
Hollister Biosciences (CSE: HOLL) (OTC: HSTRF) (FRA: HOB) announced today the closing of its previously announced definitive agreement to acquire leading cannabis extract brand, Venom Extracts. The acquisition of Venom Extracts is a profoundly transformational milestone for Hollister, which currently has its products in 220 dispensaries throughout California.
Venom Extracts is an ultra-premium cannabis extract brand and large scale producer of award-winning medical cannabis distillate in Arizona. In addition to bolstering Hollister’s high-quality brand portfolio and expanding the company’s footprint across multiple states, the Venom deal will also strengthen Hollister’s fundamentals dramatically.
For the year ended December 31, 2019, Venom Extracts’ management reported the following earnings from the sale of its cannabis concentrates and cartridges:
- Generated revenue of over CDN $16.4 million
- EBITDA of more than CDN $2.5 million
- Venom Extracts is reportedly off to a strong start in 2020 and expects to post record Q1 revenue.
Carl Saling, founder and CEO of Hollister, comment on the company’s milestone acquisition:
“We are extremely pleased to complete this transformational and highly accretive acquisition. Our acquisition of Venom Extracts bolts on substantial revenue and EBITDA to Hollister, while providing Venom Extracts the ability to expand its offering of premium branded product into the California marketplace. Likewise, our acquisition also allows Hollister to introduce its products into the Arizona and Nevada marketplaces through Venom Extracts’ existing distribution channels.”
“This is an exciting acquisition, and we are very pleased to announce closing. This transaction represents the next step in ensuring the future growth of both Hollister and Venom Extracts. We are looking forward to increasing our geographic presence by expanding into the California marketplace through Hollister’s existing platform, and exploring expansion of our existing product portfolio collectively,” stated Jacob Cohen, founder of Venom Extracts.
As per the terms of the all-stock transaction, Hollister purchased Venom Extracts for approximately CDN $20 million. The price tag paid by Hollister “represents a transaction multiple of 1.2x 2019 revenue, with approximately 70% of the consideration paid upfront and the approximately 30% balance to be paid upon milestone achievements related to revenue targets for Venom Extracts, or in any event, on December 31, 2021”. View full press release here for complete deal terms.
Following customary due diligence, Hollister expects the deal to officially close on March 24, 2020.
Hollister Set to Enter Booming Psychedelics Arena
Earlier this month, Hollister announced its intention to enter the burgeoning psychedelics sector after signing an LOI to acquire Alphamind Brands. The Alphamind acquisition is another highly transformative deal for Hollister, which will further diversify the company’s operations while increasing shareholder value.
Alphamind Brands is a Psychedelics company based in the U.S. and Canada that operates in the legal medicinal mushroom and Psilocybin (Magic Mushrooms) markets. Alphamind is currently developing several exciting new medical mushroom products as well as conducting research and development (R&D) for Psilocybin pharmaceutical applications.
Dr. Nikos Apostolopoulos is leading Alphamind’s R&D initiatives in conjunction with accredited universities to explore Psilocybin based pharmaceutical treatments. Alphamind intends to create Psilocybin based compounds for drug development.
“We are very pleased to have entered into an LOI to complete this very exciting acquisition. It is a fundamental value of our company to improve the overall health and performance of our customers through our high-quality products and the health benefits associated with medicinal mushrooms are tremendous. Not to mention, it is our continual objective to broaden our product scope and Alphamind, with its experienced management team, is a perfect foothold for us in the fast-growing market for medicinal mushrooms and complements our existing cannabis and hemp-based product offering,” said Hollister founder and CEO, Carl Saling.
Stay tuned for further updates from Hollister on the company’s new and highly promising psychedelics venture.
COVID-19: Short-Term Crisis, Long-Term Opportunity
Throughout the recent COVID-19 related financial crisis, Hollister has continued to execute flawlessly and has also stepped up to help fight the pandemic by producing thousands of bottles of hand-sanitizer for its home town of Hollister, California.
Along with nearly every other stock in North America, Hollister’s share price has become a victim of the Coronavirus market correction. At no fault of their own, Hollister has seen its valuation cut in half over the past month.
As is often the case throughout history, the worst financial crises also bring with them the greatest opportunities for investors. Currently, the price of Hollister’s stock does not reflect the true value of the company. As it relates to Hollister, there is now a golden opportunity for investors to position themselves in great company at an extremely attractive valuation. When the market rebounds, we’ll likely look back at these low prices in disbelief.
Hollister’s CSE listed ‘HOLL’ stock looks to have found its bottom at around $0.05. On a risk to reward basis, the potential upside Hollister offers at this current point in time far outweighs any possible downside. While you’re at home self-quarantining over the next few days, take a moment to read up on Hollister via the links below. We think you’ll be impressed.
Hollister‘s shares are listed on the following exchanges:
- 🇨🇦Canada | Canadian Securities Exchange: Hollister Biosciences (CSE: HOLL)
- 🇺🇸United States | OTC Markets Exchange: Hollister Biosciences (OTC: HSTRF)
- 🇩🇪Germany | Frankfurt Stock Exchange: Hollister Biosciences (FRA: HOB)
Hollister Biosciences is a paid client of The Cannabis Investor.
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