July 18, 2019
Jamie Blundell, President & COO is pleased to provide the following update on Grassroots, one of CGOC’s private holdings:
GR Companies Inc. (“Grassroots”), one of CGOC’s private portfolio holdings is one of the largest vertically-integrated multi-state operators in the U.S, and has signed a definitive agreement (the “Transaction”), with Curaleaf Holdings Inc. (“Curaleaf”), one of the world’s largest cannabis companies by revenue and the largest in the U.S. across key operating metrics. The transaction, based in cash and stock, is valued at approximately US$875 million.
The highly complementary acquisition brings together the largest public and largest private multi-state operators in the U.S. to offer a full range of products to consumers in states across the country. As a market leader throughout the Midwest, Grassroots has a portfolio of 61 dispensary licenses, with 20 currently in operation, and 17 cultivation and processing licenses that will substantially accelerate Curaleaf’s continued expansion across the nation.
Grassroots has a leading presence in large markets in which Curaleaf presently does not operate, including Illinois, which in June, became the 11th state to legalize adult-use cannabis, and Pennsylvania, the fifth most populous state in the U.S. The proposed Transaction will expand Curaleaf’s presence from 12 to 19 states, and the combined company will have 131 dispensary licenses, 68 operational locations, 20 cultivation sites and 26 processing facilities. This Transaction will add new markets to Curaleaf, including Arkansas, Michigan, North Dakota, Oklahoma, and Vermont, and build on its existing businesses in Connecticut, Maryland, Nevada and Ohio. Upon completion of the proposed Transaction, Curaleaf will be the largest medical and adult-use cannabis company with access to a total population of approximately 177 million people.
Transaction Terms and Approvals
Curaleaf will acquire Grassroots for total consideration of approximately $875 million, composed of $75 million in cash, 102.8 million subordinate voting shares of Curaleaf, and $40 million in Curaleaf shares priced at the 10-day volume-weighted average price prior to closing of the Transaction. At closing, securityholders in Grassroots will have approximately 16% pro-forma ownership of Curaleaf on a fully diluted basis after giving effect for the acquisition of Cura Partners Inc., (click here to read press release dated May 1, 2019).
The proposed Transaction is expected to close in early 2020, subject to customary closing conditions, Grassroots’ stockholders’ approval and regulatory approvals. The transaction has been unanimously approved by the Boards of Directors at both companies.
To read the full news release issued on July 17, 2019, please follow this link.
CGOC invested US$1,000,000 (CAD$1,338,600), in Grassroots in April of 2019 in exchange for 1,000 convertible debentures with 8% interest and face value of US$1,000 each. The debentures are convertible into common shares of Grassroots at a price per share reflecting a pre-money valuation of US$550 million. CGOC will provide shareholders with an update on this Transaction as well as the actual breakdown of the return on investment in Grassroots upon successful completion of the acquisition.
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For further information please contact Cannabis Growth Opportunity Corporation:
|Website: www.cgocorp.com||Investor Relations Email: firstname.lastname@example.org|
Grassroots is a cannabis company dedicated to serving, advancing and respecting the cannabis movement. Through its unique, vertically integrated business model, Grassroots grows, processes and sells trusted cannabis products that enhance life’s moments for people from all backgrounds. Its retail brand, Herbology, offers a unique, wellness and education-focused dispensary experience. Grassroots has built its portfolio at an unprecedented pace, with facilities in highly competitive markets, including Illinois, Nevada, Pennsylvania, Michigan, Maryland, Oklahoma, Ohio, Vermont, North Dakota, Arkansas and Connecticut. The executive management team is comprised of a group of highly skilled business leaders united by a common belief: Cannabis inspires us to live deeply.
For more information, visit grassrootscannabis.com
Curaleaf Holdings, Inc. is the leading vertically integrated multi-state cannabis operator in the United States. It is a high-growth cannabis company with a national brand known for quality, trust and reliability. The company is positioned in highly populated, limited-license states, and currently operates in 12 states with 48
dispensaries, 13 cultivation sites and 12 processing sites. Curaleaf has the executive expertise and research and development capabilities to provide leading service, selection, and accessibility across the medical and adult-use markets, as well as in the CBD category through its Curaleaf Hemp brand and Bido brand for pets. On May 1, 2019, Curaleaf announced the acquisition of the Select brand from Cura Partners for $948 million.
For more information, please visit curaleaf.com