- CHAL finalizes acquisition of five HomeGrown retail dispensaries
- Strategic move provides exceptional geographic compatibility with Chalice
- The fact that Homegrown is profitable makes this a highly accretive acquisition for GLDFF’s earnings per share
In a state that is paving the way forward for cannabis, Chalice Brands (CSE: CHAL) (OTCQB: GLDFF), previously operating under the name Golden Leaf Holdings Ltd., is making its mark. The company recently announced a transformational acquisition that brings a chain of five Oregon-based retail dispensaries under the Chalice umbrella (https://nnw.fm/Sj1Lk). The dispensaries, previously owned by SMS Ventures LLC, known as Homegrown, are located in Portland, Salem and Albany. This transaction increases Chalice Brands’ retail store footprint from 7 to 12 locations in the state of Oregon.
“We have been diligently searching for the appropriate footprint expansion for our retail business in Oregon that represented the right fit and to be in a position to fund the acquisition,” said Chalice Brands president and CEO Jeff Yapp. “Homegrown’s culture aligns perfectly within ours and provides an exceptional geographic compatibility with Chalice and offers an expansion into parts of Oregon in which Chalice does not operate currently.
“We have the ability to significantly increase vertical margin revenue through the distribution of our existing edibles and extraction manufacturing as well as our own grow,” he continued. “Homegrown is a well-run retail operation with a very dedicated team at all five stores that we will continue to rely on as we go forward. The owners of Homegrown have been wonderful to work with during this process and will continue to assist us as we transition and integrate the business. Like GLH, Homegrown holds a deep commitment to prioritizing customer service with exceptional consumer transparency and building long-term relationships with people.”
The first state to decriminalize small amounts of marijuana, Oregon represents the third largest cannabis market in per capita consumption in the country, reporting $275 annual cannabis spend per capita (https://nnw.fm/ttQ9W). The state boasts 16.5 dispensaries per 100,000 resident, offers a stable cultivation and supply chain, and has an optimal climate for growing best-in-class cannabis. No wonder Chalice is eyeing the promising market.
The acquisition announcement outlined the acquisition details: the purchase of Homegrown’s dispensaries was completed for total consideration of an estimated $9.75 million, or 0.9 times Homegrown’s first quarter 2021 annualized revenue. The fact that Homegrown is profitable makes this a highly accretive acquisition for Golden Lead Holdings’ earnings per share.
It is anticipated that consumers will find Chalice Brand products on Homegrown shelves in the coming months, providing the opportunity to increase gross margins by between 5% and 10% in the newly acquired stores.
“Management is excited to combine with Homegrown and fully expects to continue its migration to better valuations for shareholders as we continue to execute our acquisition strategy,” said Chalice Brands executive chair John Varghese. “As part of our West Coast-focused growth strategy, we will continue to seek acquisitions like these to demonstrate that we are good allocators of capital. We will continue to grow our business with positive cash flow from both internal organic revenue growth with stringent cost containment. On the acquisition front, we have a growing funnel of actionable and accretive targets that we are assessing and will pursue in the near term.”
Chalice Brands is a premier consumer-driven cannabis company specializing in production, processing, wholesale, distribution and retail, with seven dispensaries in Portland, Oregon. The Company is committed to developing a dynamic portfolio built around the recognized brands of Chalice Farms, with a focus on health and wellness. Chalice operates nationally through Fifth and Root and has operations in Oregon and California.
For more information, visit the company’s website at www.ChaliceBrandsLtd.com.
NOTE TO INVESTORS: The latest news and updates relating to GLDFF are available in the company’s newsroom at https://nnw.fm/GLDFF
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