Cannabis Global has acquired a stake in Natural Plant Extract of California, which operates a licensed cannabis manufacturing and distribution business operation out of Lynwood, California. NPE owns a Type 7 California Manufacturing License as well as a California Distribution license. Under the terms of the agreement, which closed on August 31, 2020, the Company is purchasing (18.8%) of Natural Plant Extract's outstanding capital stock.
"This is a significant agreement for Cannabis Global, as it provides the Company with further penetration into the important California market, which is valued at billions of dollars per year," commented Chief Executive Officer, Arman Tabatabaei. "We believe we create significant added value for our shareholders and new synergies by combining our managerial talents and technologies with the licenses and marketplace opportunities of NPE. We have aspirations of becoming a major distributor and manufacture of our cannabis products in California. NPE is ahead of most of the competition in the state in terms of permitting, build-out and licensing."
Under the terms of the agreement, which will be further explained in an upcoming filing with the Securities & Exchange Commission ("SEC"), the Company will pay the seller 27 monthly payments of $20,000 and a long-term note for $1,500,000, which can be converted to common shares in the Company at a later date. The total purchase price is $2,040,000. As a result of the acquisition, Cannabis Global expects to book over $2 million of net tangible assets as of the end of the August 31, 2020 fiscal year, likely allowing the Company to become "penny stock exempt" based on the OTC Markets guidelines and to be eligible for the up-listing of its common stock trading venue.
The Company believes this investment will allow for faster expansion into important distribution channels for California and speed market penetration of several internally developed cannabis-related technologies, while meaningfully expanding the asset base of the Company. NPE is currently operating as a distributor and is completing the build-out of its manufacturing facility, which is expected to be completed and fully operational in the first quarter of 2021.
Mr. Tabatabaei continued, "We see many applications for our technologies within the regulated THC-oriented marketplace. Without access to partners with the proper licenses, we have been limited only to the hemp and CBD marketplaces. We expect this new relationship and equity stake in NPE to significantly change this dynamic allowing us more freedom in introducing our cannabis technological innovations to the very active California marketplace."
For more information:
Cannabis Global
520 South Grand Ave Suite 320,
Los Angeles Ca 90071
310-986-4929
[email protected]
cannabisglobalinc.com