Packaged cannabis consumer products business SLANG in the world inc. is about to merge with Vermont’s High Fidelity, Inc., owners of Champlain Valley Dispensary and Southern Vermont Wellness – which have been renamed CeresMED earlier this month.
The Toronto-based company, which also has operations in Colorado and Oregon, expects to close the deal in the third quarter of 2021. Under the deal, SLANG will pay $ 12 million by issuing some 31,578,947 of its Voting shares restricted to 38 cents per share and $ 3 million in cash at closing.
Additionally, SLANG agreed to pay an additional $ 250,000 through the issuance of 657,894 of its priced shares and $ 2 million in cash within 18 months of the completion of the merger. The company has also agreed to issue additional shares if certain performance milestones are met.
“It has been a long way to get here, and we are very happy to have found someone who matches our values ââand how we see ourselves in the larger industry, and who can capitalize on us,” Bridget Conry, director of brand experience for CeresMED, told Seven Days this week. âIt has been really difficult to finance our growth.
The merger will also strengthen the company’s business footprint by adding four fully operational stores and the ability to add two new dispensaries once licenses are obtained.
What this means for slang: Acquisition of Vermont’s largest medical cannabis business strengthens SLANG’s operational footprint by adding a 28,000 square foot cultivation, production, laboratory and distribution facility with a planned 50,000 square foot expansion to the CeresMED head office in Milton. The expansion is expected to be completed in 2022 and will eventually allow the company to hire up to 50 additional employees.
Additionally, after the deal closes, SLANG will hold two of the five medical cannabis licenses in Vermont. The merger will also strengthen the company’s business footprint by adding four fully operational stores and the ability to add two new dispensaries once licenses are obtained.
SLANG, which buys and sells licenses for edibles and cannabis accessories, has been distributing some of its own brands in CeresMED dispensaries since 2015. Since federal law prohibits the interstate sale of cannabis, CeresMED purchases the formulas and manufacturing equipments in Slang, then assembles the products. at its own facility in Vermont.
High Fidelity, founded in 2012 in Burlington, serves approximately 70% of registered medical cannabis patients in the state.
High Fidelity, founded in 2012 in Burlington, serves approximately 70% of registered medical cannabis patients in the state. He also owns the Vermont CBD store Natural remedies for Ceres. The acquisition will give CeresMED access to new channels for its CBD products made in Vermont in 12 other states, including Oregon and Colorado, where Slang has established distribution networks.
As previously reported by Heady Vermont, High Fidelity has in the past been accused by patients of selling moldy or substandard cannabis products. In 2019, the Vermont Agency of Agriculture investigated an anonymous report that the company was growing more than 200 medical cannabis plants under the cover of a hemp farm in Pete’s Greens, but the investigation was forwarded to the Department of Public Security and discreetly closed.
Even before legalization, the number of medical marijuana patients and the quality of dispensaries lagged behind other legal MMJ states.
Since Vermont legalized the cultivation and possession of cannabis in July 2018, the number of patients registered for medical marijuana has fallen sharply. Even before legalization, the number of medical marijuana patients and the quality of dispensaries lagged behind other legal MMJ states. Onerous restrictions, such as the limited number of plants, the restriction of patients to a single dispensary, and long journeys to the nearest location, among other factors, have contributed to a less-than-expected medical cannabis market. great for sick Vermonters.
âWe recognized the value of high fidelity as a local success story and pioneer in the Vermont cannabis community, focused on patient and consumer access,â SLANG CEO Chris Driessen said Monday in a statement. release published on the company’s website. âThe High Fidelity team are proud of their accomplishments to date and are committed to doing things the ‘Vermont Way’, which means focusing on quality, collaboration and the best customer and employee experience. “
Shayne Lynn, President of High Fidelity, said in the same press release: âSince our inception, we have led the Vermont cannabis industry with a ‘people first’ philosophy and we are focused on expanding. patient access and consumer education. Through this transaction, we will be able to share our experience and resources to help create new regional brands and create a new business model in the industry. As a member of SLANG, we can continue to expand our offerings, create more jobs in our communities, and stay true to our Vermont heritage.
Additionally, High Fidelity is awaiting approval of a social equity application for a medical cannabis retail license in New Jersey. The request was submitted in conjunction with partners from Trenton, New Jersey, the company said, with a mission to support communities disproportionately affected by the War on Drugs.
Retail sales in Vermont of adult cannabis products are expected to begin in fall 2022, with sales expected to reach US $ 230 million in 2023.
Heady Vermont is made possible by the support of readers. If you find our industry news and information valuable, please consider an annual subscription – and gain premium access to content, priority industry alerts, and exclusive partner offers.