International Cannabrands Signs Definitive Purchase and Sale Agreement with La Vida Verde
September 21, 2018
International Cannabrands Inc. (CSE:JUJU) (the “Company”) is pleased to announce that it has signed a definitive agreement for the acquisition of 51% of La Vida Verde (“LVV”). The Company is acquiring its equity interest in LVV for US$6 million (comprised of US$3.0 million in common shares of the Company and US$3 million in cash) and investing an additional US$2 million of working capital into the business.
The transaction is at arm’s length. See press releases dated April 24, and July 9, 2018, for additional information.
The acquisition will be completed through two significant closing events – the first on November 1, 2018, where the Company will pay US$1 million to acquire an 8.5% equity interest and will have invested US$1.3 million into the business and a second closing on January 2, 2019, where the Company will acquire an additional 43% of LVV in exchange for the issuance of 25,225,161 Common Shares of the Company and schedule principal seller’s notes for an aggregate of US$2,000,000 due as to 50% on March 31, 2019 and October 31, 2019.
The notes bear interest at a rate of 5% per annum and are secured by a pledge of the securities purchased. An additional working capital investment in the business of US$700,000 will be made in April 2019.
La Vida Verde is a highly respected branded cannabis product manufacturer and distributor based in Santa Cruz, CA. The business has powerful growth prospects due to its family of brands including Skunk Feather concentrates, organic LVV edibles and other cannabis products.
La Vida Verde was founded and is run by Bryce Berryessa and Eric Hara, two of the most respected veterans of the cannabis industry in California. Selected financial information for LVV for the six months ended June 30, 2018 (all of which has been prepared by LVV’s management), includes the following: Revenue of $8,980,022; Net Income of $545,653; Total Assets of $2,621,325 and Total Liabilities of $1,358,818 which includes $110,000 of long term liabilities.
The working capital investment in LVV will support an expansion of sales and operations staff, inventory required by rapid growth and to expand manufacturing capacity. Steve Gormley, CEO of International Cannabrands Ltd., commented: “We are so very excited to have been able to complete the agreement to invest in La Vida Verde. LVV is an excellent example of the type of business we are seeking and the types of partners we wish to bring into our family. Obviously we are very focused in the near term on funding the acquisition per the agreement.”
