SLANG Worldwide Continues to Consolidate Colorado Supply Chain with Acquisition of Pleasant Valley Ranch
Toronto, Ontario--(Newsfile Corp. - September 29, 2020) - SLANG Worldwide Inc. (CNSX: SLNG) (OTCQB: SLGWF) ("SLANG" or the "Company"), a leading global cannabis consumer packaged goods (CPG) company with a diversified portfolio of popular brands, today announced that it has entered into an agreement dated September 25, 2020 (the "Agreement") to acquire (the "Acquisition") Colorado-licensed cannabis cultivator Pleasant Valley Ranch, LLC ("Pleasant Valley").
SLANG anticipates that ownership of a cultivation operation will provide greater assurance of a supply of raw materials in the growing Colorado market, while also reducing its input costs and thereby improving gross margins.
"The purchase of Pleasant Valley is another key step in our strategy to assemble a fully integrated, wholesale operation in our core market of Colorado," said SLANG President & CEO Chris Driessen. "The Colorado market continues to generate double-digit growth, and this transaction will help us capture additional market share. The acquisition of a trusted supplier will help us continue to expand our production volumes while improving our unit economics and maintaining our high standards of quality."
Pleasant Valley is a privately-owned company located in Carbondale, CO specializing in high-quality, organically grown cannabis strains that thrive in high altitude, mountainous environments. Pleasant Valley has 1,600 square feet of greenhouse cultivation area, and a five-acre outdoor facility at an elevation of approximately 7,500 feet that produces an authentic, naturally cultivated product using snowmelt water. It currently has a capacity of 3,600 plants and produces approximately 4,800 pounds annually and is projected to double its capacity by 2021. Pleasant Valley has been a key supplier of raw materials for SLANG-branded concentrate and edibles products in Colorado.
The purchase of Pleasant Valley marks another milestone in SLANG's strategy of consolidating its supply chain in Colorado. Following the approval of its application for suitability by the Colorado Department of Revenue's Marijuana Enforcement Division (the "MED") in August 2020, the Company acquired Denver-based licensed cannabis producer and distributor, Peoria Partners LLC. The Company is evaluating other potential acquisitions and opportunities in Colorado.
The Colorado market generated total retail sales in excess of $1.7 billion USD in 2019, and grew by 22% in the first seven months of 2020 compared to the same period last year, according to BDSA. In these conditions of rising demand, the retail market price of flower in the state has recently exceeded $1,300 USD per pound, according to the Colorado Department of Revenue, an increase of more than 30% from a year earlier.
Pursuant to the Agreement, the Company will acquire Pleasant Valley for consideration comprised of a non-material amount of cash and common shares of the Company. The Acquisition will be completed by way of three-cornered amalgamation and is anticipated to close in the fourth quarter of 2020. Closing of the Acquisition is subject to the satisfaction or waiver of customary closing conditions, including applicable regulatory approval by the MED.
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About SLANG Worldwide Inc.
SLANG Worldwide Inc. is a global leader in the cannabis CPG sector with a diversified portfolio of popular brands distributed across the United States. The Company specializes in acquiring and developing market-proven regional brands as well as launching innovative new brands to seize global market opportunities. SLANG is listed on the Canadian Securities Exchange under the ticker symbol SLNG and on the OTCQB under the symbol SLGWF. For more information, please visit www.slangww.com.