Red White & Bloom Closes Acquisition of PharmaCo with 21 Cannabis Licenses
- State transfers 21 medical and adult-use cannabis licenses to RWB Michigan, LLC.
- Acquisition includes:
- Eight fully operating dispensaries (five dually licensed);
- Two operational indoor cultivation facilities totaling over 30,000 sq. ft.;
- One municipally licensed 10-acre outdoor cultivation facility operationally ready for 2022 season;
- Two ready-to-open dispensaries; and
- 22 owned properties for potential additional cultivation and dispensary locations.
- RWB now fully licensed and integrated from seed-to-sale for medical and adult use cannabis in Michigan, a top U.S. market with $1.79 billion in 2021 cannabis sales
- RWB expands to 180 employees in the State of Michigan
TORONTO and DETROIT, Feb. 08, 2022 (GLOBE NEWSWIRE) — Red White & Bloom Brands Inc. (CSE: RWB and OTC: RWBYF) (“RWB” or the “Company”) a multi-state cannabis operator and house of premium brands, has received all regulatory approvals and has closed its acquisition of PharmaCo, Inc. via RWB Michigan, LLC, the Company’s wholly owned subsidiary (“RWB Michigan”), in an all-stock transaction. The transaction was originally announced on July 27, 2020. All dollar amounts are stated in U.S. dollars.
I’m pleased to announce that we have closed on the PharmaCo acquisition and now control all aspects of our Michigan operations. This is a major milestone for RWB and its shareholders as we continue to execute key components of our growth strategy and build our house of brands across our core markets, as promised.
Brad Rogers, Red White & Bloom Chairman and CEO
We are now in the driver’s seat on over 20 assets across Michigan – one of the largest and fastest growing cannabis markets in the country.
“RWB’s strategy is to optimally leverage regulatory frameworks in our core markets for success, financially and operationally,” Rogers continued. “Through our previous partnerships, we were able to propel our Platinum Vape® brand cartridges to the #1 most popular brand in Michigan and establish a solid distribution channel for additional branded products. As we take full control of our Michigan operations from seed- to-sale, our anticipated 2022 initiatives include extending our branded product lines, updating our dispensaries to heighten the customer experience, creating supply chain efficiencies and growing revenue and profitability.”
The PharmaCo acquisition expands RWB’s footprint in Michigan beyond its Warren manufacturing facility and its industry leading Platinum Vape® brand. RWB now owns and operates the following:
- Five & Dime – Detroit – https://www.fiveanddimedet.com/
- Shake & Bake – Detroit – https://shakeandbakedet.com/
- Motown Meds – Detroit– https://motownmedswest.com/
- Remedii Natural Health, Bay City – Bay City– https://remediibaycity.com/
- Dank on Arrival – Bay City– https://doabaycity.com/
- Remedii Natural Health, Battle Creek – Battle Creek– https://remediibattlecreek.com/
- The Remedii Station – Vassar– https://remediistation.com/
- Remedii Natural Health Stateline – Morenci – https://www.statelinewc.com/, and
- Two additional dispensary locations that are fully built out and ready to open
- Two indoor cultivation facilities – Glendale and Marquette
- A 10-acre outdoor cultivation site – Au Gres.
- Multiple assets for expansion of RWB’s dispensary and cultivation footprint.
A visual of RWB’s newly acquired entities can be found here.
“We welcome the many talented PharmaCo employees to the RWB team to continue their good work,” Rogers said. “We value their contributions and feel it is important to pay competitive wages and provide key leaders and employees with a stake in the company so they share in the rewards of helping RWB achieve its goals.”
RWB Michigan is committed to investing in the communities in which it is located. RWB will continue to carry the torch with local workforce organizations and community educational programs and partnerships that will provide workplace training and continuing education to qualified employees. Special consideration will be given to qualified local displaced auto workers and veterans.
RWB’s educational and community vision includes a directive of financial and charitable contributions to non-profit and local charities and civic causes within the communities in which it is privileged to do business.
Consideration for the transaction includes the issuance of 37 million units of RWB (“Units”). Each Unit consists of one common share and one series 2 convertible preferred share (each, a “Series 2 Preferred Share” and collectively, the “Series 2 Preferred Shares”) in the capital of RWB. Each Series 2 Preferred Share shall be convertible, in accordance with the formula as set out in the terms in RWB’s articles, at any time or times before April 24, 2022. The Series 2 Preferred shares are subject to a voluntary lock-up until January 1st, 2023. The Units were issued at a deemed price of CDN$0.90 per unit.
In addition, RWB has converted $30 million of previously advanced loans to PharmaCo into preferred shares in PharmaCo issued to RWB Michigan immediately prior to closing. Upon issuance, RWB Michigan will hold 100% of the ownership of PharmaCo.
Settlement of Debt with PharmaCo Debt Holders
RWB has entered into agreements with certain creditors of PharmaCo for the settlement of an aggregate of CDN$4,048,000 of indebtedness, through the issuance of 4,024,000 Units. The Series 2 Preferred Shares are subject to a voluntary lock-up until January 1st, 2023. All shares issued in connection with the debt settlement will be subject to a hold period of four months and one day for Canadian holders and subject to applicable restrictions in accordance with Rule 144 for U.S. holders. The debt settlement is expected to close in the coming days.
Granting of options and performance-based restricted stock units
Certain officers, directors, employees and advisors have been issued an aggregate of 500,000 stock options at $0.50 per share and 1,250,000 performance based restricted stock units with various vesting periods.
About Red White & Bloom Brands Inc.
The Company is positioning itself to be one of the top three multi-state cannabis operators active in the U.S. legal cannabis and hemp sector. RWB is predominantly focusing its investments on the major US markets, including Michigan, Illinois, Massachusetts, Arizona and California with respect to cannabis, and the US and internationally for hemp-based CBD products. Visit website: www.RedWhiteBloom.com, or follow RWB on social media: