Canadian company Lineage Grow Company Ltd. (CSE:BUDD) and iconic California cannabis company Harborside have entered an agreement. The deal, announced today, is a reverse takeover that sees Harborside—a public company—being bought over by the smaller Lineage Grow.
Lineage Grow Acquires Harborside
The agreement will see Lineage acquiring "all of the issued and outstanding securities of Harborside on a debt free basis in exchange for newly issued common shares of Lineage valued at approximately $200 million."
California is expected to become the largest adult-use cannabis market in the United States and along with that, the merger should mean an expansion into the Canadian market for Harborside, meaning even further growth potential.
Who is Harborside?
Harborside owns and operates two cannabis dispensary outlets in California—Harborside Oakland and Harborside San Jose. Founded in 2006, the two Harborside dispensaries combined have generated over $400 million CAD in sales. In addition, the company operates a cultivation campus in Salinas, California that was established in 2016.
The agreement will see Harborside gaining access to capital needed to undertake expansion plans in California and the contiguous western states.
From the Companies
The founder of Harborside, Steve DeAngelo, said about the merger:
"I am delighted to see Harborside merging with Lineage, which will allow us to access the Canadian capital markets, position Harborside for unparalleled growth and opportunity, and bring our gold standard approach and branded products to more communities and greater numbers of consumers."
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Lineage's chief executive officer Peter Bilodeau commented on the acquisition:
"We are very excited to be joining forces with Harborside, one of the most iconic and longstanding brands in the cannabis industry, which positions the resulting company extremely well for future growth. After the Transaction, the company will have access to the necessary resources to fulfil our combined vision for California’s most trusted, vertically-integrated cannabis company focused on high margin retail and branded product sales channels."
Trading
Trading in Lineage shares is currently halted due to the announcement and will resume, pending the approval of the CSE. Once the transaction has officially been closed, trading is expected to resume in the fourth quarter of this year.
Featured Image: Freepik
