Toronto-based multistate cannabis company Red White & Bloom Brands (RWB) has entered the California market by signing a binding letter of intent to purchase California-based Platinum Vape for $35 million in cash and $25 million in further bonuses.
The press release states that RWB will acquire all ownership interests in Platinum Vape for a total cash payment of $35 million which will consist of $7 million in cash at closing, $13 million in cash payable within 120 days of the deal closing, and a $15 million note that is convertible after 12 months and payable on the third anniversary of the closing.
The sellers of Platinum Vape, George and Cody Sadler, will also be entitled to receive up to $25 million more on the first anniversary of closing, contingent on the company’s performance.
Platinum Vape has reported annualized revenue run rate in excess of $70 million and sells cannabis products, including vape cartridges, edibles and pre-rolls to more than 700 retailers throughout California, Michigan and Oklahoma.
The acquisition of Platinum Vape is the first acquisition by RWB since going public and also marks RWB’s entry into California.
RWB also recently provided notice to PharmaCo, Inc. of its intent to exercise the Company’s right to acquire 100% of PharmaCo.
“PharmaCo has established significant market share within the state of Michigan. Now that we have completed our go public transaction, we felt that the time was right for us to take the next step of rolling our critical mass asset base together in what we believe is one of the top 3 most important cannabis states by market size and potential”
“This will simplify and streamline the structure of the Company, more easily evidencing the overall underlying value of RWB for our shareholders and stakeholders. PharmaCo has worked very hard on building out these assets for the last 2+ years and we believe it is time for us to enter this large and important market, taking advantage of PharmaCo’s early mover advantage. Once closed, both retail and institutional investors should benefit from this now straightforward structure,” said Brad Rogers, CEO of RWB.
