Vancouver, BC, March 06, 2020 — Hollister Biosciences Inc. (CSE: HOLL, FRANKFURT: HOB, OTC: HSTRF) (the “Company” or “Hollister”), a diversified cannabis branding company with products in 220 dispensaries throughout California, is pleased to announce that further to the signing of the definitive agreement on March 6th, 2020, the Company has now closed its transformational acquisition of Venom Extracts (“Venom Extracts”), a leading Arizona cannabis extract brand and one of the state’s largest producers of award-winning medical cannabis distillate and related products.
HIGHLY ACCRETIVE $20,000,000 ACQUISITION, ADDING CDN$16.4 MILLION OF 2019 REVENUE
For the year ended December 31, 2019, Venom Extracts reports having generated CDN$16.4 million in revenue and CDN$2.5 million in EBITDA from its product line of cannabis concentrates and cartridges as reported by Management. The auditor confirmed via a comfort letter that Venom Extract’s 2019 revenues are materially as represented by Management. Venom Extract’s Management also reports a strong start to 2020, having generated revenue of CDN$ 2.4 million in January of 2020 and CDN$2.4 million in February of 2020.
The all-stock purchase price of CDN$20,000,000 represents a transaction multiple of 1.2x 2019 revenue, with 70% of the consideration paid upfront and the 30% balance to be paid upon milestone achievements related to revenue targets for Venom Extracts. After conducting normal course due diligence, the acquisition is now closed.
The Company has acquired Venom Extracts for CDN$20,000,000 with such payment to be issued in Hollister common stock (the “Payment Shares”).
- The stock price upon which the Payment Shares have been calculated is CDN$0.20 per Hollister share.
- The initial 70% of the Payment Shares have been issued, subject to hold periods.
- The remaining 30% of the Payment Shares will be issued when and if the following milestones have been met on or prior to December 31st, 2021:
- 20% (of the total number of Payment Shares) will be issued when revenue of Venom Extracts reaches CDN$30,000,000 (calculated in accordance with IFRS from January 1, 2020).
- 10% (of the total number of Payment Shares) will be issued when revenue of Venom Extracts reaches CDN$40,000,000 (calculated in accordance with IFRS from January 1, 2020).
“We are extremely pleased to complete this transformational and highly accretive acquisition”, shared Carl Saling, Founder and CEO of Hollister Biosciences Inc. “Our acquisition of Venom Extracts bolts on substantial revenue and EBITDA to Hollister, while providing Venom Extracts the ability to expand its offering of premium branded product into the California marketplace. Likewise, our acquisition also allows Hollister to introduce its products into the Arizona and Nevada marketplaces through Venom Extracts’ existing distribution channels.”
“This is an exciting acquisition and we are very pleased to announce closing”, shared Jacob Cohen, Founder of Venom Extracts. “This transaction represents the next step in ensuring the future growth of both Hollister and Venom. We are looking forward to increasing our geographic presence by expanding into the California marketplace through Hollister’s existing platform, and exploring expansion of our existing product portfolio collectively.”
In association with the acquisition, Hollister will not be assuming any long-term debt, a new control position will be created and there is no change in Management, or the Board of Directors of Hollister being contemplated at this time.
Finder’s fees will be payable in accordance with the policies of the Canadian Securities Exchange.
This press release is available on the Company’s CEO Verified Discussion Forum, a moderated social media platform that enables civilized discussion and Q&A between Management and Shareholders.
About Hollister Biosciences Inc.
Hollister Biosciences Inc. is a diversified cannabis company with multiple, high-quality products now carried in 220 of Indus Holdings (CSE: INDS), Hollister’s exclusive distribution partner’s 600 dispensaries. This level of penetration is expected to grow as the Company accelerates its seed to shelf, high margin business and product development model.
Capitalizing on this success, Hollister’s vision is to become the sought-after premium brand portfolio of innovative, high quality cannabis across multiple states and hemp products nationwide.
Our wholly owned California subsidiary, Hollister Cannabis Co, is the 1st state and locally licensed Cannabis Company in the City of Hollister, California, the birthplace of the “American Biker” from which we embrace the outlaw roots of Hollister to drive our Company fearlessly down the road of success.
Products from Hollister Cannabis Co. include HashBone, the brand’s premier artisanal hash-infused pre-roll ranked as California’s #1 hash infused pre-roll, along with solvent-free bubble hash, pre-packaged flower, pre-rolls, tinctures, vape products, and full-spectrum high CBD pet tinctures.
About Venom Extracts
Venom Extracts is one of Arizona’s premier extract brands and one of the state’s largest producers of award-winning medical cannabis distillate and related products. With an experienced management team and unparalleled reputation for quality, Venom Extracts prides itself as a differentiated extraction company by producing legal Marijuana products at a price point that allows retailers to generate higher profits. Focused on proprietary efficiencies, the Company is able to produce more product per square foot than its competition, maintaining lower costs and risks than a typical extraction company. The company’s expansion strategy is centered on entering new markets/states that are approved for medical cannabis use and/or approved or have a reasonable expectation to be approved for recreational use in the near future.
HOLLISTER BIOSCIENCES INC.:
Neither the Canadian Securities Exchange nor its Market Regulator (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Information: This news release includes certain statements that may be deemed “forward-looking statements”. The use of any of the words “anticipate”, “continue”, “estimate”, “expect”, “may”, “will”, “would”, “project”, “should”, “believe” and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. These statements speak only as of the date of this News Release. Actual results could differ materially from those currently anticipated due to a number of factors and risks including various risk factors discussed in the Company’s disclosure documents which can be found under the Company’s profile on www.sedar.com
As Released on: Newswire