One of the best ways to invest in cannabis is through an ETF, or exchange traded fund. As of this writing, the Horizons Marijuana Life Sciences ETF ( HMMJ ) is the largest U.S. marijuana ETF. To get in on this market, you can buy shares from an exchange or you can buy directly from a fund. The Horizons ETF holds the largest segment of current marijuana stocks, so chances are you’ll want to buy from them. The Horizons Marijuana Life Sciences ETF (HMMJ) is a U.S. equity exchange-traded fund (ETF) that invests in U.S. companies involved in the marijuana industry. The fund’s underlying holdings include companies involved in cultivation, distribution, processing, and other cannabis-
After investing in a number of cannabis businesses, the leading cannabis investment firm in the U.S., Harborside, has announced that it is acquiring the best-known cannabis brand in California, Sublime, for an undisclosed amount. Harborside CEO, Steve DeAngelo, said, “We have come a long way since we started in 2010, and Harborside’s goal was to make cannabis available to every American, and we are proud to say that we have achieved that goal. We look forward to expanding our presence in California with Sublime’s products and to helping make Sublime one of the best cannabis products in the world.”
Harborside announces agreement to acquire Sublime for $43.8 million
- Sublime is California’s award-winning pre-roll brand and the number one brand in market share.
- Plans to expand the company’s retail and wholesale product line.
OAKLAND, CA, June 1. 20, 2021 /PRNewswire/ – Harborside Inc. (Harborside or the Company) (CSE: HBOR) (OTCQX: HBORF), a vertically integrated California cannabis company, announced today that it has entered into a definitive agreement (the Agreement) to acquire 100% of the issued and outstanding shares of Sublimation Inc. (Sublime), an award-winning cannabis company based in Oakland, California, for $43.8 million (acquisition). The acquisition is expected to close in July 2021, subject to customary closing conditions. Founded in 2016, Sublime is best known for its extensive line of powerful, high-quality, affordable prerolls under the Fuzzies brand, the leading preroll brand in the state of California, as well as its vape and roll-your-own color kits. Since 2019, Sublime has experienced revenue growth of approximately 70%, with a 7.9% share of the California preroll market at the end of 20201. Sublime is strategically positioned for continued growth, as prerolls have been the fastest growing sub-segment of the cannabis market in California since the early 2020s. Upon completion of the acquisition, Harborside expects to realize significant synergies by combining Sublime brands, production capabilities and a robust distribution system with high-quality cannabis grown at the company’s facilities in Salinas, California. This is expected to increase gross profit and EBITDA by expanding the reach of the Sublime, Harborside and Key brands throughout the state of California. Harborside also expects to strengthen Sublime’s marketing capabilities, which should result in increased retail profits for the company as a separate brand in its portfolio. Ultimately, Harborside will seek to license the Fuzzies California lifestyle brand in other legal recreational markets across the country, particularly those where potent products are not currently available. This acquisition adds an iconic, award-winning California brand with an exceptional product offering and customer base to our growing brand portfolio.
Peter Bilodeau, acting CEO Harborside
added Mr. Bilodeau: Harborside has been a Sublime customer for many years and we know the quality of their products. With existing production capacity and the imminent completion of the upgrade of our Salinas cultivation facility, we are well positioned to support the continued growth of the Sublime brands and to expand the existing Harborside product mix in the retail and wholesale markets, which will ultimately result in increased profitability for our entire business. We are delighted to continue to offer innovative, high-quality products to consumers while creating significant value for our shareholders. The company will issue new guidelines in due course. Ahmer Iqbal, CEO of Sublime, added: Harborside is known as an innovative pioneer in the California cannabis market and has built a long-term reputation as a leading retailer and manufacturer of high-quality products. As a leader among California brands, we are pleased to have Sublime join the Harborside brand portfolio. We are leveraging Harborside’s manufacturing and sales capabilities to expand distribution of Sublime products throughout California. _______________________ 1Source: BDS Analytics Details of the agreement Upon completion of the transaction, Harborside will acquire 100% of the issued and outstanding shares of Sublime (Sublime Shares) for total consideration of $43.8 million (purchase price). The purchase price consists of approximately $38.4 million payable in voting shares of the Company, representing approximately 207,579.66 voting shares of the Company based on the volume weighted average price of the Company’s subordinated voting shares on the Canadian Securities Exchange (CSE) during the 30 days immediately preceding the date of the agreement, and approximately $5.4 million in cash (of which approximately $3.4 million will be used to repay Sublime’s existing debt). The purchase price represents a ratio of approximately 1.78x Sublime’s estimated 2021 revenue, or $24.6 million. The agreement provides, among other things, for customary representations and covenants, including a mutual non-sale clause and a termination fee of $1.5 million to be paid by the Company or Sublime in certain circumstances. The acquisition is subject to approval by Sublime’s shareholders and to certain regulatory approvals and other customary closing conditions of this nature. The directors and senior executives and certain shareholders of Sublime, who together own approximately 86.5% of the outstanding shares of Sublime, have entered into voting and support agreements and have agreed to vote in favor of the acquisition. In addition, upon completion of the Acquisition, the Company will enter into a lock-up agreement with certain shareholders of Sublime (Lock-up Shareholders) with respect to the multiple voting shares of the Company that such shareholders will receive as a result of the Acquisition (the Lock-up Agreement). Pursuant to the lock-up agreement, the voting shareholders agree not to sell, transfer or otherwise dispose of the voting shares received. The restrictions expire in three installments: 50% of the shares vest on the 12-month anniversary and 25% of the shares vest on the 15- and 18-month anniversaries of the vesting, respectively. Harborside’s board of directors approved the acquisition. In addition, Sublime’s Board of Directors approved the acquisition and decided to recommend that Sublime’s shareholders vote in favor of the acquisition. financial and legal advisers ATB Capital Markets Inc. is acting as financial advisor and Duane Morris LLP and Cassels Brock & Blackwell LLP are acting as legal counsel to Harborside. PI Financial Corp. provided a fairness opinion to the Harborside Board of Directors. VIII Eight Capital is acting as financial advisor and CGL LLP and Gowling WLG (Canada) LLP are acting as legal advisors to Sublime. This press release does not constitute an offer to sell or a solicitation of an offer to buy, nor will there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful, including securities in the United States. The securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the 1933 Act), or any state securities laws, and may not be offered or sold within the United States or to U.S. persons (as defined in Regulation S under the 1933 Act), or for their account or benefit, unless registered under the 1933 Act and the securities laws of the states or an exemption from such registration requirements is available. For the latest news, events and media coverage, visit the Harborside corporate website at www.investharborside.com or connect with us on LinkedIn and Twitter. About Harborside: Harborside Inc. is one of the oldest and most respected cannabis retailers in California. It operates three large dispensaries in the San Francisco Bay Area, a dispensary in the Palm Springs area with the only drive-thru in Southern California, a dispensary in Oregon and a cannabis cultivation/production facility in Salinas, California. Harborside has played an important role in making cannabis safe and available to California’s large and diverse consumer community since 2006, when it received one of the first six medical cannabis licenses in the United States. Today the company has retail, distribution, cannabis cultivation, nursery and production licenses. Harborside is a public company listed on the Canadian Securities Exchange (CSE) under the symbol HBOR and on the OTCQX Best Market under the symbol HBORF. For more information about Harborside, please visit Harborside’s SEDAR profile at www.sedar.com. The sublime: Sublimation Inc. is one of California’s most innovative private cannabis producers and is known for its tasty and highly potent Fuzzies branded products. The Oakland-based company develops, manufactures and distributes prerolls, vape cartridges, pre-ground flowers, batteries and chewables under the Sublime brand and for customers of other brands. Founded in 2016, Sublime has won numerous awards for its Fuzzies tincture prerolls and Gold vaper cartridges, and is licensed to produce and distribute cannabis for medical and adult use. For more information on Sublime, visit www.sublimecanna.com. Non-IFRS measures, reconciliation and discussion This press release may contain references to EBITDA, which is a non-IFRS financial measure. EBITDA is a measure of a company’s overall financial performance and is used in certain circumstances as an alternative to profit or net income. EBITDA is essentially net income (loss) plus interest, taxes, depreciation, non-cash adjustments and other unusual items. This indicator can be used to analyse and compare the profitability of companies and sectors, as the effects of financing and investment are not taken into account. It is often used in valuation multiples and can be compared to enterprise value and revenue. This measure has no standardized meaning under IFRS and therefore may not be comparable to similar measures used by other companies. There are no comparable IFRS financial measures in Harborside’s financial statements. A reconciliation of other non-IFRS measures is provided in the Company’s Management Discussion and Analysis for the year ended December 31, 2014. March 2021. These non-IFRS measures are presented because management has evaluated the financial results with and without adjustments and believes that the non-IFRS measures presented provide additional perspective and insight into the Company’s underlying business performance. The Company believes that these additional measures provide useful information to shareholders and investors to understand our performance and may help to assess the Company’s business relative to its competitors. These non-IFRS financial measures should not be viewed as superior to, or a substitute for, the financial measures presented in the entity’s financial statements and should be read in conjunction with the IFRS financial measures. For more information, see the Use of Non-IFRS Measures and Non-IFRS Measures sections of the Company’s MD&A at March 31, 2021, which is available on the Company’s profile at www.sedar.com. Original press release For factual information about The Harborside Group, visit the company’s Sponsored Investor Dashboard. Stay ahead of the crowd by subscribing to 420 Investor, the largest and most comprehensive subscription service for cannabis dealers and investors since 2013. 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