IRVINE, Calif. – Premium cannabis brand Orchid Ventures, Inc. (CSE:
ORCD)(OTC:ORVRF) entered into an asset purchase agreement on July 2, 2019, for the acquisition of certain assets of GreenBloom Cannabis Co., a vertically-integrated cannabis operator with five retail stores, two cultivation facilities, one distribution entity, and six brands in Oregon and California.
Also part of the Acquisition is a development in California of cultivation, processing, and retail facility with 300,000 square feet of canopy, and a 25,000 square foot extraction facility, which would make it one of the largest facilities in the State of California once developed. The Acquisition will provide Orchid Ventures with a vertically integrated operator, with current projected revenue of up to CA$163.7MM for the next twelve months with an estimated EBITDA of 13.6%* (actual EBITDA of 2018 was 13.6%), and would establish one of the largest West Coast-centric cannabis conglomerates in the industry. (*This is a clarification at the request of IIROC)
Orchid Ventures currently sells a premium line of vaporized products, plus an expanding line of new CBD and THC products across several categories in California and Oregon.
With this acquisition, Orchid will also add to their portfolio of brands and significantly
increase cash flow in order to accelerate development and expansion into existing and
new markets. Importantly, Orchid will control a sophisticated and quality supply-chain
from seed to sale, cementing itself as one of the most diverse and robust cannabis portfolios in the industry.
“This is a tremendous alignment of interests between not just two companies but in a
sector in need of innovation, expansion and growth that has been proven by
GreenBloom Cannabis and their leadership”, said Tom Soto, Board Chairman of Orchid
Ventures, Inc, “the strength in the markets that GreenBloom has demonstrated,
partnering with the premier consumer brand in Orchid Essentials makes for a highly
valued, consumer-driven acquisition that will further define where the cannabis sector
could scale.”
“For the last year, I have worked closely with GreenBloom Cannabis, visiting all their
facilities, meeting with their teams, and developing a great relationship with
management. The alignment of our two organizations will greatly increase margins and
solidify the supply chain in both California and Oregon,” said Corey Mangold, Founder and CEO of Orchid Ventures, Inc. ”Along with adding a large amount of revenue and
EBITDA, we are greatly furthering our capabilities to expand Orchid Essentials into
multiple new states and countries in the coming year. Having George Mattia join the
executive leadership team along with joining the Board of Directors, will add
tremendous value and operational skills to the organization.”
“My initial vision in establishing GreenBloom Cannabis was to create a profitable health
and well-being based cannabis company that takes consumers, the community, and the future of this sector in mind,” said George Mattia, Founder, and CEO of GreenBloom. “In joining forces with the Orchid family we will be in a stronger position to leverage our cultivation, processing and retail assets and expertise with Orchid’s product innovation capability, and their proven success in building great brands through disruptive marketing and sales excellence. Choosing Orchid Ventures also allows us to scale our combined businesses to serve even more consumers and provide the highest quality cannabis products at affordable prices.”
Pursuant to the terms of the Definitive Agreement, in consideration for the Acquisition
and upon closing thereof, the Company will pay an aggregate purchase price of
US$10,000,000 to be paid out over the next 12 months, and issue 50,000,000 common shares at a deemed price of CA$0.50 per share (the “Payment Shares”). The Payment Shares will be subject to escrow conditions and/or resale restrictions as required by applicable securities laws and the policies of the CSE as well as additional voluntary hold periods agreed to by GreenBloom. There are no finders fees, nor change of control.* (*This is a clarification at the request of IIROC)
The Acquisition is subject to certain closing conditions, including, without limitation,
completion of due diligence by each party. There can be no assurance that the
Acquisition will be completed as proposed or at all. The Acquisition is currently expected to close in August 2019.
In addition, the Company also announces that it has entered into a Memorandum of
Understanding (“MOU”) with Infusion Factory, LLC (“Infusion”) and its parent company
ICON Holdings, Inc. pursuant to which Infusion will provide vendor services in exchange for, among other things, the issuance of a warrant (“Warrant”) to purchase of up to 200,000 Shares at the price of CAD$0.33 per share with a term of 36 months. The issuance of the Warrant is subject to the approval of the Exchange. In addition, the
Company issued 2,000,000 stock options, which vested immediately, at the exercise
price of CAD$0.33 to its independent directors.
None of the securities to be issued pursuant to the Acquisition or the Warrant have
been or will be registered under the U.S. Securities Act of 1933, as amended (the “U.S.
Securities Act”), or any state securities laws and any securities issued pursuant to the
Acquisition and Warrant are anticipated to be issued in reliance upon available
exemptions from such registration requirements pursuant to Rule 506(b) of Regulation
D and/or Section 4(a)(2) of the U.S. Securities Act and applicable exemptions under
state securities laws. In addition, the securities issued under an exemption from the
registration requirements of the U.S. Securities Act will be “restricted securities” as
defined under Rule 144(a)(3) of the U.S. Securities Act and will contain the appropriate
restrictive legend as required under the U.S. Securities Act.
ABOUT ORCHID VENTURES, INC.
Orchid Ventures, Inc. is an Irvine, CA-based multi-state brand that launched in Oregon and California in August 2017 and has since developed a mass-market brand and loyal consumer following with its premium vape products. Orchid’s products lines are currently sold in 350+ dispensaries across California and Oregon and are handcrafted and designed for maximum flavor and overall enjoyment. The company’s proven processes and passion for what it does carry through into its products. The end result is an unparalleled experience for new and practiced cannabis users alike. Orchid plans to expand its brand into new national markets as well as global markets such as Latin America and Europe. With a continued focus on brand and intellectual property development, Orchid will execute strategic acquisitions to solidify an integrated cannabis manufacturing and distribution infrastructure with the goal of becoming a dominant premium cannabis brand in the United States. Orchid’s management brings significant branding, product development and distribution experience with a proven track record of scaling revenues, building value generating partnerships and creating enterprise value. Learn more at https://orchidessentials.com/.
