TORONTO, Nov. 22, 2019 (GLOBE NEWSWIRE) -- North Bud Farms Inc. (CSE: NBUD) (OTCQB: NOBDF) ("NORTHBUD" or the "Company") is pleased to announce that Bonfire Brands USA (“Bonfire”), a wholly owned subsidiary of NORTHBUD, has signed multiple definitive agreements related to its previously announced letters of intent with the Qlora Group and Monterey Holdings (see September 12, 2019 press release).
Transaction Terms:
Bonfire Brands USA has finalized the acquisition of an 11-acre property located at 20180 Spence Road Salinas, California from Monterey Holdings Inc. The property currently consists of 300,000 sq. ft. of licensable greenhouse space with 60,000 sq. ft. actively cultivating cannabis and a 2,000 sq. ft. building licensed for distribution. The purchase price of the property is USD$8,000,000 which represents the fair market value of the real estate. The buyer and seller have entered into a seller carry back financing for the full purchase price.
Bonfire Brands USA has signed a definitive agreement with the Qlora Group for the acquisition of cultivation, processing and distribution licenses associated to the Spence Road property. As part of this acquisition Bonfire Brands USA also acquires all the Intellectual Property (IP) and assets related to the brands California Bud Co and Live For The Day (LFTD). The two brands combined for approximately USD$6,500,000 in unaudited sales over the past 18 months. In consideration for this acquisition Bonfire has assumed a USD$2,500,000 debt note from the Qlora Group. The debt will be settled over a 24-month period through a combination of cash and stock at the discretion of the note holder. Immediately upon signing of the definitive agreement Bonfire will have acquired 80% ownership of the licenses with the remaining 20% to be transferred after approval from the California Cannabis Control and Licensing Bureau.
The buyer will be taking possession of all biological assets including: 6000 plants currently in the fifth week of flowering;~ 5000 plants in various stages of vegetative growth;~ 350 Lbs. of dried and harvested flower and trim; and 3000 filled vape cartridges of various strains.
“On the heels of the historic adoption of the MORE Act, the NORTHBUD and Bonfire team is extremely proud to have finalized this agreement and how the structure allows for the acquisition to be financed from ongoing cash flow from the acquired business with minimal dilution while allowing the company to acquire what we believe to be exceptionally positioned infrastructure located in the heart of California’s Sun Belt and home to the largest cannabis cultivators in the state,” said Ryan Brown, CEO of NORTHBUD.
This infrastructure will serve as the primary operation for Bonfire Brands USA within the state of California, which is considered to be the largest cannabis market in North America valued at USD$3 billion dollars per year according to Arcview Market Research and BDS Analytics (August 2019).
“We are very pleased with the successful acquisition of the Salinas facility,” said Justin Braune, President of Bonfire Brands USA. “We have been working closely with the cultivation team at Qlora over the past two months and will immediately take over operations to begin driving revenue growth. We anticipate our first harvest within 45 days and have been actively negotiating agreements with distribution and cultivation partners whom wish to leverage our strategic infrastructure through joint venture and subletting agreements. We anticipate closing these transactions in the near future with the goal of having the California operation generating positive cash flow in the near term.”
The Transaction is a significant acquisition but will not result in a “Fundamental Change” pursuant to the policies of the CSE. NORTHBUD will be preparing the necessary corporate and securities filings in order to secure the required approvals for the Transaction.
NORTHBUD has agreed to pay up to 3% in finder fees to arm’s length parties in connection with the closing of the Transaction. The fee is payable in common shares of NORTHBUD.
The closing of the Transaction is conditional on the receipt by the parties of applicable corporate and regulatory approvals including that of the CSE.
About North Bud Farms Inc.
North Bud Farms Inc., through its wholly owned subsidiary GrowPros MMP Inc., is pursuing a license under The Cannabis Act. The Company has built a state-of-the-art purpose-built cannabis production facility located on 135 acres of Agricultural Land in Low, Quebec, Canada. NORTHBUD through its wholly owned U.S. subsidiary, Bonfire Brands USA has acquired cannabis production facilities in California and Nevada. The Salinas, California property is located on 11 acres which currently consists of a 300,000 sq. ft. of licensable greenhouse space with 60,000 sq. ft. actively cultivating cannabis and a 2,000 sq. ft. building licensed for distribution. The Reno, Nevada property is located on 3.2 acres of land which was acquired through the acquisition of Nevada Botanical Science, Inc. a world class cannabis production, research and development facility with 5,000 sq. ft. of indoor cultivation which holds medical and adult use licenses for cultivation, extraction and distribution.
For more information visit: www.northbud.com
