4Front Ventures Corp. has signed a definitive merger agreement on March 30, 2022 to acquire all of the issued and outstanding shares of common stock of Island Cannabis Co.
"This acquisition of Island is the first step of a broader California strategy that supports our earlier decision to construct what we believe is one of the cannabis industry's largest and most efficient processing centers," said 4Front CEO Leo Gontmakher. "Island is widely recognized for its high-quality, diverse line of pre-rolls, flower and infused products, and has been remarkably successful in building a loyal following in the extremely competitive California market. Once integrated into 4Front's Commerce facility, we can reduce production costs and scale volume of the Island Cannabis Co. brand. This will accelerate Island's growth by making a respected brand even more attractive to California retailers and consumers. We are also ecstatic to have Founder and CEO, Ray Landgraf, COO, Brandon Mills, and the Island leadership team join the 4Front family. We believe our company's success in acquiring and retaining talent to our management team is imperative to value creation."
"We are most excited about what this acquisition means for Island's customers," said Ray Landgraf, CEO of Island. "California is arguably one of the most competitive cannabis markets in the world. Leveraging 4Front's platform, operational efficiency and scale enables Island to follow through on its promise to deliver the discerning California consumer only the highest quality products and most innovative cannabis experiences."
"California is well known as a highly fragmented, competitive market with many struggling participants amid stagnation and pricing pressures," continued 4Front CEO Gontmakher. "We view ourselves as well prepared for this market, given similarities to the challenges we faced and overcame in Washington state. This is a golden opportunity for us, where we can leverage our proficiencies and expertise to pick up attractive assets at great prices that, when added to our production facility, immediately become profitable and accretive."
"We believe that our California thesis is resonating, as we continue to execute on our strategic growth plan in the state. Island is a great fit and meets all the criteria we look for in accretive M&A. Simply put, our goal in California is to emerge as one of the top high-quality cannabis producers and price leaders in the largest and most competitive marketplace in the world. The addition of Island is an exciting first step, and as we continue to expand in California, we expect to announce additional similarly accretive strategic acquisitions over the coming months."
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