Chalice Brands Ltd (CHALF)

[DD8]

More cannabis consolidation: Chalice Farms owner Golden Leaf in merger deal :
By Pete Danko – Staff Reporter, Portland Business Journal
Nov 13, 2018, 12:35pm PST

Oregon’s cannabis consolidation wave has washed over Golden Leaf Holdings Ltd., the Portland company that made national news earlier this year after announcing plans to franchise its Chalice Farms retail outlets.

Under a non-binding letter of intent, Golden Leaf will merge into a new subsidiary of Irvine, Calif.-based Terra Tech Corp.

Although the unit will be owned by Terra Tech, in an earnings call last week, Golden Leaf CEO William Simpson said “the way the math works out is basically a merger of equals when it comes to value.”
The companies noted that closing the deal will take a definitive agreement and a dizzying range of approvals, extending into Canada, where Golden Leaf is technically headquartered and is listed on the Canadian Securities Exchange.

Terra Tech operates a total of six retail outlets in California and Nevada, with plans for more, and is building cultivation and production facilities in both states. It has a flower and oils brand called IVXX. Outside cannabis, it has an indoor-grown herb unit called Edible Garden.
Golden Leaf is in the process of expanding operations in California and Nevada, but its current business is focused mostly in Oregon, where Terra Tech hasn't ventured. Golden Leaf would also give the merged company reach into Canada — Golden Leaf is technically headquartered there (though its operations are based in Portland) and has a grow operation north of the border.

As for profit, neither company is making one; the focus now is on permits, gearing up operations and grabbing market share, something they believe they can do better together in an increasingly competitive space.

“Terra Tech and GLH have several projects in process and under construction, and as they come on line, they will further bolster our collective strength,” Simpson said. “As a combined company, we will have a stronger footing in an industry that is undergoing rapid consolidation.”

As for franchising the Chalice Farms shops, it's on the back burner. Golden Leaf said in a recent filing it "no longer intends to partner with BlackShire Capital," the private equity firm that had been planning to invest nearly $20 million into the effort. In the earnings call last week, Simpson said "we put our franchising opportunities on a sidestep" as the company worked on expanding production and wholesale operations in California and Nevada.

The List
Largest Cannabis-Related Businesses in Oregon
Ranked by Oregon employees
Rank Name Oregon Employees

1 Golden Leaf Holdings 140
2 Cura Cannabis Solutions 119
3 Grown Rogue 45
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