Liht Cannabis Corp. announce that it has executed a letter of intent to reach an agreement in principle, dated April 17, 2019, whereby the Company, or its wholly-owned subsidiary, will seek to acquire all or substantially all of the equity interests of the ACC Group of Companies, a Nevada-based group of companies licensed for cannabis cultivation and well-known for its cannabis cultivars. Liht management anticipates the execution of a definitive agreement to acquire ACC will take place on or prior to June 15, 2019, with the closing of the transaction anticipated to follow shortly thereafter upon the satisfaction of such terms and conditions precedent to the Closing, which are customary for transactions of this nature. Following the completion of the transaction contemplated in the Agreement, the Company will integrate ACC while rebranding itself as "Citation Growth Corp."
Upon completion of the Proposed Transaction, the Company anticipates that it will have completed a strategic alignment in its Nevada operations to become a cultivator and distributor of premium cannabis products to Nevada's medical and recreational markets.
Following the Closing of the Proposed Transaction, Liht anticipates that the acquisition of ACC will:
- create one of the largest license holders in the State of Nevada, with an estimated, consolidated licensed footprint for the combined entity of up to 566,000 ft2, consisting of up to 550,000 ft2 in cannabis cultivation space and up to 16,000 ft2 in processing space for cannabis concentrates and edibles, assuming the successful completion of all proposed site phases, with an estimated capital expenditure requirement for the combined entity of approximately US$90.0MM;
- significantly enhance Liht's Nevada operations by combining the Company's comprehensive experience in organic cultivation techniques with ACC's award-winning seed genetics program, fostering a new, premium cannabis powerhouse in the State of Nevada, and any such other jurisdictions it may enter, as regulations and legislation may permit;
- Opportunity to build upon ACC's successful CY2018 unaudited financial performance, where it achieved revenue of US$7.9MM, gross margin of 57%, adjusted EBITDA of US$1.0MM, and adjusted EBITDA margin of 12.8%;
- provide the Company with an ACC management-estimated, annualized approximately US$115MM in additional forward-looking revenue, at an ACC management-estimated, annualized EBITDA margin of approximately 35.0%,assuming the completion of all proposed phases and maximum operational efficiencies being realized, with an estimated capital expenditure requirement of approximately US$50.0MM; and
- enhance the Company's current suite of portfolio products with the addition of three (3) new, established brands within the State of Nevada, which include BluntBox, Garden of Weeden, and Superior, complementing Liht's established FIORE cannabis flower brand.
Howard Misle, who will be joining Liht as the Company's CEO upon the Closing of the Proposed Transaction, remarked, "ACC has been pleased to observe the significant traction and rapid growth achieved by the Liht team since its entrance into the Nevada cannabis market, while also noting Liht's reputation is quickly becoming synonymous with success, innovation, and high-quality production." Mr. Misle added. Following the appointment of Howard Misle as CEO, Rahim Mohamed will serve as President of the Company.
For more information:
Liht
102-1561 Sutherland Ave
Kelowna, BC Canada, V1Y 5Y7
1-778-583-4476
info@lihtcannabis.com
lihtcannabis.com