Harborside has signed a definitive agreement to acquire Sublimation, a cannabis manufacturing company located in Oakland, CA, for a total consideration of US$43.8 million. The Acquisition is expected to close, subject to customary closing conditions, in July 2021.
"Founded in 2016, Sublime is best known for its expansive line of high-potency, high-quality and affordable, Fuzzies-branded pre-rolls, a leading brand of pre-rolls in the state of California, as well as vapes and roll-your-own flower kits," the Harborside team explains. "Since 2019 Sublime has delivered a revenue CAGR of approximately 70%, and ended 2020 with 7.9% California pre-roll market share. Sublime is strategically positioned for continued growth as pre-rolls are the fastest growing cannabis sub-segment within the California market since the beginning of 2020."
Harborside will seek to license the Fuzzies California lifestyle brand in additional legal recreational markets across the country, particularly those that do not currently have high-potency infused products.
"This acquisition adds an iconic, award-winning California brand, with an exceptional product offering and consumer following, to our growing brand portfolio," said Peter Bilodeau, Interim CEO of Harborside. "Harborside has been a customer of Sublime for many years and we know the quality of their products. With the existing production capacity and soon to be completed upgrades at our Salinas cultivation facility, we are well-positioned to support the continued growth of the Sublime brands while expanding the reach of Harborside's existing branded product portfolio in both the retail and wholesale markets, which we expect to ultimately drive increased profitability across our entire business. We're very excited to continue to provide consumers with innovative, high-quality products while delivering strong value for our shareholders. The Company will issue new guidance in due course."
Ahmer Iqbal, CEO of Sublime, added, "Harborside is known for being an innovative pioneer within the California cannabis market and has garnered a long-term reputation across the state for being a leading retailer and producing high-quality products. As a leader among California brands, we are thrilled that Sublime will join the Harborside owned-brand portfolio, leveraging their production and retail capabilities to further expand the distribution of Sublime products throughout California."
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