Slang Worldwide Inc. has entered into a definitive agreement and plan of merger with respect to its previously announced proposed acquisition of Allied Concessions Group Inc. (ACG), a manufacturing and distribution business based in Colorado. Pursuant to the terms of the Merger Agreement, SLANG will issue up to an aggregate of 66,120,730 common shares in the capital of the Company, provided that SLANG may elect that up to 60% of such shares may be issued as restricted voting shares in the capital of the Company, as determined by SLANG in its sole discretion and subject to further adjustment in accordance with the Merger Agreement (the "Shares").
ACG is an Infused Product Manufacturer (MIP) that produces O.pen, Bakked and Pressies branded cannabis products in Colorado. ACG is comprised of two different manufacturing and distribution facilities that extract both hydrocarbon and CO2 oil for all SLANG branded products in Colorado. The Acquisition is the latest development in the Company's strategy to consolidate its supply chain in Colorado, which is one of its core markets with an estimated cannabis market size of $1.7 B1 in 2019. This planned expansion follows SLANG's recent acquisitions of licensed cannabis cultivator Pleasant Valley Ranch, LLC and licensed manufacturer and distributor, Peoria Partners LLC in Colorado.
Chris Driessen, CEO of SLANG, said, "We are thrilled that our long awaited acquisition of Allied Concessions Group is approaching its conclusion. Once we have final approval to close, which we expect this quarter, we will control our own destiny from seed to wholesale of the entire portfolio of SLANG brands in our largest market. This acquisition will allow us to continue to consolidate and streamline our operations in Colorado while increasing our revenue. With greater control over production and distribution planning, we expect to improve our gross profit per unit sold and strengthen our leadership position in the state."
Pursuant to the terms of the Merger Agreement, an aggregate of 3,306,037 Shares will be placed in escrow upon closing of the Acquisition to satisfy indemnification claims and working capital adjustments. In addition, all Shares will be subject to a contractual lock-up pursuant to which 1/8 of the Shares shall be released from such lock-up on the last day of each calendar quarter following closing of the Acquisition.
Completion of the Acquisition remains subject to the satisfaction or waiver of all conditions precedent in the Merger Agreement, including the receipt of the approval of the Colorado Department of Revenue's Marijuana Enforcement Division. Closing of the was Acquisition is expected to occur in Q1 2021.
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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. For more information, please visit www.slangww.com.
1 Source: BDSA
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