Halo Collective entered into definitive agreements to acquire Food Concepts LLC, the master tenant of an approximately 55,000 square foot indoor cannabis cultivation, processing, and wholesaling facility in Portland, Oregon operated under the Pistil Point name, and the related licenses issued by the Oregon Liquor Control Commission ("OLCC") and other operating assets owned by the entities doing business as Pistil Point.
CEO and Founder of Halo Collective, Kiran Sidhu, commented, "Halo was founded in Oregon, and we believe this is the market of the future as the potential Federal legalization comes to fruition with no cultivation taxes, light local taxation, abundant labor, and water and power at lower rates than most other states. We believe the acquisition of Pistil Point will accelerate the trajectory of our market leadership in Oregon as we establish a large campus in Portland. We now have a triple play in Oregon, with indoor, greenhouse, and outdoor cannabis cultivation, and plan to continue building our capacity to be one of the larger indoor growers in the state."
Over the course of the next year, Halo plans to embark on a significant expansion of the new facility's production, processing, and distribution operations. The facility currently generates approximately $300,000 of revenue and $100,000 of free cash flow per month since April, 2021 and the expansion is expected to increase these metrics by up to 250% within a year period.
In addition, Halo plans to establish a new central distribution hub by consolidating its current distribution centers in Medford and Eugene, Oregon, into the new facility in Portland, which is within a 60-mile radius of 70% of the state's population4. This move will significantly reduce delivery time to the majority of dispensaries in the state. Halo intends to relocate its final assembly processes from Medford to Portland to expand the company's overall production capacity at least two-fold as Halo's market share in Oregon continues to grow. The company expects production in Portland to enable more white label and custom manufacturing business with Halo's dispensary partners thereby increasing potential sales within the state.
Along with upgrading the production and processing facilities and moving distribution to Portland. Halo intends to open Oregon's first wholesale business-to-business, cash and carry showrooms for bulk and finished goods, which will stock all 12 brands that Halo currently distributes in the state and a large assortment of white label products including but not limited to Flower (flower, pre-rolls, and canagars), Concentrates (shatters, resins, hash, and hash rosins), Vape Pens (cannabis-derived, flavored, live resin, and hash rosin) and Consumables (gummies, syrups, and tinctures), Topicals, and Beverages (including brands acquired in the Halo's previously announced licensing arrangement with -Elegance Brands, Inc.).
"With Halo's acquisition of certain Pistil assets, we now enter the very attractive indoor flower and pre-roll markets in Oregon, which in the flower segment has the highest price point, is the fastest growing, and carries the highest margins," said Dustin Jessop, Halo's CRO and Winberry's Founder. "We plan to greatly expand this capacity from 200 to 500 flowering lights. This acquisition will increase our number-one wholesale footprint in Oregon, giving us the same-day delivery capability to a vast majority of the market. We plan to double our overall production capabilities as well as establish Oregon's first cash and carry showroom. Once the first showroom is completed, we plan to do the same in Eugene, Bend, and Medford. We welcome Sid to the Halo family and look forward to working with him."
Sid Gupta, Founder of Pistil Point, continued, "When I decided to focus on the East Coast recreational markets, Halo was the best choice to acquire our Oregon operations. Halo is a world-class organization and they have quickly established the largest footprint in Oregon. I am excited to be part of the Halo team. I look forward to working with Halo in Oregon and beyond."