buylowsellhi007 wrote: Many of us assume this is a merger or purchase of the Washington Group.
That may not be the case. Look at the wording of the release.
Partnership, Partner, License. Now that could relate to the legal regulations or could simply be something entierly differant than many assume.
Final deal could in fact be structured in many differant ways, modified considerably or abandoned.
Washington State: Strategic Partnership The Company is pleased to announce the execution of the Washington Agreement and implementation of a strategic partnership with BMF Washington LLC, one of Washington's premier cannabis companies (the "Strategic Partner"). The Washington Agreement includes the acquisition of certain assets and the provision of certain goods and services to the Strategic Partner in furtherance of creating a strategic partnership. The Washington Agreement does not include any assets which require a license from the Washington Liquor and Cannabis Board to use or possess. The Strategic Partner will remain a cannabis licensee in Washington. The strategic partner produces, processes and distributes a range of cannabis oils and flower products in Washington. Under the strategic partnership, GLH and the Strategic Partner will undertake an integration of best practices, brands, and growth initiatives to further drive market share and profits in both the Washington and Oregon markets.
As consideration in connection with the Washington Agreement, the Strategic Partner will be paid a total of $15 million USD payable within 45 days of the transaction closing date together with the issuance of 300,000 warrants exercisable for a two-year period. Of the $15 million purchase price, $3 million USD is payable in cash and $12 million USD payable in GLH stock. GLH anticipates that this strategic relationship will be highly EBITDA accretive to its current operations upon completion of the integration.
Washington State has an established recreational marijuana market where oil and extracts products are already regulated and available for consumer purchase through licensed retailers. In connection with the Washington Agreement, the parties have begun implementing a strategic relationship and have entered into certain agreements whereby GLH will license propriety intellectual property to the Strategic Partner, provide the Strategic Partner with services and non-cannabis materials, lease equipment and other property, and also lease employees to the Strategic Partner.
"Washington, in addition to being double the size of Oregon, has a more settled regulatory environment. Through this strategic relationship, GLH has aligned itself with an established producer/processor with an experienced management team that currently enjoys a significant market share of what continues to be a very immature and fragmented oil and derivatives market," stated GLH CEO, Don Robinson.
Certain U.S. states, including the state of Washington imposes a residency requirement for licensed operators and their individual owners. As such, in the state of Washington the Company will focus on providing services to the industry rather than directly owning production or retail operations. In connection with the strategic partnership, the Company will not be directly involved in the production or retail operations of the Strategic Partner but rather will provide ancillary services to the Strategic Partner.