LAS VEGAS — GB Sciences, Inc. (OTCQB: GBLX) is extremely pleased to announce it has signed a letter of intent to purchase 100% of the ownership interests of NevadaPURE’s Las Vegas operation for $28 million in cash and the assumption of approximately $5 million of outstanding liabilities. The purchase is contingent on the completion of due diligence within approximately 30 days, negotiation of a final purchase agreement and regulatory approval.
The annualized sales run rate of NevadaPURE is over $16 million based on its performance since adult use became legal in Nevada, making the purchase price only two times sales. This sales multiple compares with GB’s current price-to-annualized-sales multiple of 16, and a typical multiple of 60 or much more for publicly traded cannabis companies whose sales are similar to GB’s.
This deal also provides GB with an additional three licenses from the state of Nevada, including a cultivation license, a production license and a dispensary license. This vertical integration will enable margins to increase significantly since a middleman between GB and its retail customers will no longer be necessary.
COO Kevin Kuethe said: “We have taken a major step toward capturing a lead position in the Nevada market. With our expertise in the science of cultivation, we plan on significantly improving the quality of the NevadaPURE facility’s output, as well as dramatically increasing the sales revenue.”
The deal enables GB to take over a very attractive lease of a 72,000 sq. ft. building, which is currently producing 350 pounds of dried cannabis monthly, with a growing capacity that can be expanded to allow 12,000 pounds per year. The building also contains ample space to accommodate partnerships that will increase royalty revenues.
CEO John Poss said: “We are really pleased and excited by this deal. Gaining 100% ownership of a dispensary, picking up $16 million in annual sales, providing additional capacity and space for new partnerships/brands – I can’t think of anything wrong with that!”
