Premium cannabis brand Orchid Ventures, Inc. (CSE: ORCD)(OTC:ORVRF)(“Orchid Ventures” or the “Company“) announces that at the request of IIROC the Company would like to clarify the press release issued earlier today. The Company has entered into an asset purchase agreement (the “DefinitiveAgreement“) on July 2, 2019, for the acquisition of certain assets of GreenBloom Cannabis Co. (“GreenBloom“), a vertically-integrated cannabis operator with five retail stores, two cultivation facilities, one distribution entity, and six brands in Oregon and California (the “Acquisition“).
Also part of the Acquisition is a development in California of cultivation, processing, and retail facility with 300,000 square feet of canopy, and a 25,000 square foot extraction facility, which would make it one of the largest facilities in the State of California once developed. The Acquisition will provide Orchid Ventures with a vertically integrated operator, with current projected revenue of up to CA$163.7MM for the next twelve months with an estimated EBITDA of 13.6%* (actual EBITDA of 2018 was 13.6%), and would establish one of the largest West Coast-centric cannabis conglomerates in the industry.
Orchid Ventures currently sells a premium line of vaporized products, plus an expanding line of new CBD and THC products across several categories in California and Oregon. With this acquisition, Orchid will also add to their portfolio of brands and significantly increase cash flow in order to accelerate development and expansion into existing and new markets. Importantly, Orchid will control a sophisticated and quality supply-chain from seed to sale, cementing itself as one of the most diverse and robust cannabis portfolios in the industry.
“This is a tremendous alignment of interests between not just two companies but in a sector in need of innovation, expansion and growth that has been proven by GreenBloom Cannabis and their leadership,” said Tom Soto, Board Chairman of Orchid Ventures, Inc. “The strength in the markets that GreenBloom has demonstrated, partnering with the premier consumer brand in Orchid Essentials makes for a highly valued, consumer-driven acquisition that will further define where the cannabis sector could scale.”
“For the last year, I have worked closely with GreenBloom Cannabis, visiting all their facilities, meeting with their teams, and developing a great relationship with management. The alignment of our two organizations will greatly increase margins and solidify the supply chain in both California and Oregon,” said Corey Mangold, Founder & CEO of Orchid Ventures, Inc. “Along with adding a large amount of revenue and EBITDA, we are greatly furthering our capabilities to expand Orchid Essentials into multiple new states and countries in the coming year. Having George Mattia join the executive leadership team, along with joining the Board of Directors, will add tremendous value and operational skills to the organization.”
“My initial vision in establishing GreenBloom Cannabis was to create a profitable health and well-being based cannabis company that takes consumers, the community, and the future of this sector in mind,” said George Mattia, Founder, and CEO of GreenBloom. “In joining forces with the Orchid family we will be in a stronger position to leverage our cultivation, processing and retail assets and expertise with Orchid’s product innovation capability, and their proven success in building great brands through disruptive marketing and sales excellence. Choosing Orchid Ventures also allows us to scale our combined businesses to serve even more consumers and provide the highest quality cannabis products at affordable prices.”
Pursuant to the terms of the Definitive Agreement, in consideration for the Acquisition and upon closing thereof, the Company will pay an aggregate purchase price of US$10,000,000 to be paid out over the next 12 months, and issue 50,000,000 common shares at a deemed price of CA$0.50 per share (the “Payment Shares“). The Payment Shares will be subject to escrow conditions and/or resale restrictions as required by applicable securities laws and the policies of the CSE as well as additional voluntary hold periods agreed to by GreenBloom. There are no finders fees, nor change of control.*
The Acquisition is subject to certain closing conditions, including, without limitation, completion of due diligence by each party. There can be no assurance that the Acquisition will be completed as proposed or at all. The Acquisition is currently expected to close in August 2019.
In addition, the Company also announces that it has entered into a Memorandum of Understanding (“MOU “) with Infusion Factory, LLC (“Infusion “) and its parent company ICON Holdings, Inc. pursuant to which Infusion will provide vendor services in exchange for, among other things, the issuance of a warrant (“Warrant“) to purchase of up to 200,000 Shares at the price of CAD$0.33 per share with a term of 36 months. The issuance of the Warrant is subject to the approval of the Exchange. In addition, the Company issued 2,000,000 stock options, which vested immediately, at the exercise price of CAD$0.33 to its independent directors.
None of the securities to be issued pursuant to the Acquisition or the Warrant have been or will be registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act“), or any state securities laws and any securities issued pursuant to the Acquisition and Warrant are anticipated to be issued in reliance upon available exemptions from such registration requirements pursuant to Rule 506(b) of Regulation D and/or Section 4(a)(2) of the U.S. Securities Act and applicable exemptions under state securities laws. In addition, the securities issued under an exemption from the registration requirements of the U.S. Securities Act will be “restricted securities” as defined under Rule 144(a)(3) of the U.S. Securities Act and will contain the appropriate restrictive legend as required under the U.S. Securities Act.
SOURCE Orchid Ventures, Inc.