Red White & Bloom (CSE: RWB) (OTCQX: RWBYF) announced that the company has closed the acquisition of Acreage Florida from Acreage Holdings (CSE: ACRG.A.U) (OTCQX: ACRGF) (FRA: 0VZ). The deal, which was originally announced via press release on February 25, 2021, sees RWB’s new subsidiary, RWB Florida LLC, officially take control of all of Acreage Florida’s issued and outstanding shares from Acreage Holdings’ subsidiary High Street Capital Partners, LLC.
In addition to acquiring all of Acreage Holdings’ Florida operations, RWB also acquired certain owned and leased real estate assets used in Acreage Florida’s operations.
“The Florida cannabis market is poised for tremendous growth and is forecasted to be a top 5 State by the year 2025. With approximately 450,000 medical cannabis patients currently registered in Florida, we see this as an amazing growth opportunity for the company. Combine this with a population of 20M, and we are delighted this deal has been finalized and look forward to delivering the highest quality medical products to the market,” commented Brad Rogers, Chairman & CEO of Red White & Bloom.
RWB Florida is licensed to operate medical marijuana dispensaries, a processing facility, and a cultivation facility in Florida. The company wishes to correct the previous disclosure from the news release issued on April 28, 2021 and advises that the deal also includes the sale of property in Sanderson, Florida, that includes over 15 acres of land and approximately 114,000 sq ft facility for cultivation and a 4,000 sq ft freestanding administrative office building, not an 11,000 sq ft facility as previously disclosed. In addition, RWB Florida has 8 leased stores in prime locations throughout the Sunshine State.
“Our employees are impressed with Red White & Bloom’s commitment to the local communities as they expand their ESG program around the environment, jobs, social justice and governance. We are excited to play a major role in the benefits cannabis can bring to the state of Florida,” added Jim Frasier, formerly of Acreage and newly appointed RWB Florida General Manager.
As per the definitive Stock Purchase Agreement entered into on February 21, 2021, and amended on April 27, 2021, RWB acquired Acreage Florida along with certain owned and leased real estate assets in exchange for a combination of USD $60 million in cash, stock and other considerations including:
- USD $5 million up-front cash payment previously paid on execution of the Stock Purchase Agreement;
- USD $16.5 million cash payment made on the deal’s closing;
- USD $7 million in RWB common shares amounting to 5,950,971 shares of RWB stock based on a volume-weighted average price of RWB’s stock on the CSE for the 5 trading days before closing, subject to a 12-month lock-up agreement dated April 27, 2021, between Seller and RWB under which 1/6 of the RWB Shares will be released to the seller each month commencing the 6th month after the entering into of the Lock-Up Agreement, or immediately upon a change of control transaction;
- USD $28 million in vendor take-back promissory notes (comprised of a USD $10 million 7 month note bearing interest at 8% per annum, a USD $18 million 13 month note bearing interest at 8% per annum and an approximate USD $3.5 million 5 Business Day Note bearing interest at 1% per annum);
- Promissory notes are secured by a pledge agreement between RWB Florida and the seller pursuant to which the shares of Acreage Florida were pledged to the seller and the promissory notes are guaranteed by the company; and
- The parties entered into a transition services agreement dated April 27, 2021, whereby the seller agreed to provide certain transition services to RWB with respect to continued operations of Acreage Florida by RWB until September 1, 2021, including certain financial reporting and general accounting support, the use of the “Botanist” Brand until RWB receives regulatory clearance in respect to its High Times cannabis brand or other alternative brands in Florida as well as certain HR and IT support.
For additional details on the transaction, including a full list of terms and conditions, please view the official Red White & Bloom press release here.
With U.S. Pot Stocks the Hot Theme of 2021, Here’s Why Red White & Bloom Could Be One of the Cannabis Sector’s Top Performers
Red White & Bloom is a paid client of The Cannabis Investor. The Cannabis Investor holds a position in RWB.
This report/release/profile is a commercial advertisement and is for general information purposes only. We are engaged in the business of marketing and advertising companies for monetary compensation unless otherwise stated below.