Ms. Alison Gordon reports
48NORTH ENTERS U.S. MARKET WITH ACQUISITION OF QUILL, A LEADING MULTI-STATE CANNABIS CPG BRAND
48North Cannabis Corp. has entered into a definitive agreement dated Aug. 22, 2019, to acquire Rare Industries Inc. (Quill), a U.S. multistate vaporizer technology brand with product distribution in Oregon and Washington, and near-term expansion plans for California and Nevada. The acquisition marks 48North's first foray into the United States.
Quill, a leader in the manufacturing of beautifully designed, lifestyle-focused and sleek vape products, specializes in the development of easy-to-use, controlled-dosage and health-focused disposable vape pens.
Quill distributes its unfinished branded proprietary vape delivery hardware to licensed cannabis processors that finish the products (including by filling the hardware with cannabis extracts) and distribute the finished products to licensed cannabis retailers. Quill is not itself engaged in the cultivation, distribution or possession of cannabis in the United States.
This year, in addition to Quill's established products, the company is launching a full-spectrum, hemp-based, cannabidiol-specific, internationally distributed, all-in-one vaporizer pen. As a result, 48North-owned products will now have multistate distribution and the ability to be licensed globally, where legally permitted.
"48North recognizes the importance of entering the burgeoning U.S market. I believe that authentic brands and next-generation products distributed at scale, particularly in the emerging U.S. market, will be one of the major keys to success in the cannabis industry," commented Alison Gordon, co-chief executive officer of 48North.
"Without question, the Quill suite of products aligns closely with 48North's growing portfolio of brands. This acquisition marks a critical step in the company's goal to become the trusted leader in the development, manufacturing and distribution of next-generation cannabis products and brands," concluded Ms. Gordon.
"48North's industry-leading focus on next-generation cannabis products and its brand-first consumer strategy will undoubtedly elevate Quill, its brand and products to the next level. The U.S.-based Quill team is eagerly looking forward to joining with 48North's experienced and dedicated management team," commented Ian Van Vaughan Shaughnessy, co-founder of Quill.
48North intends to leverage Quill's expanding distribution network to accelerate the distribution of the company's brand portfolio into the United States. 48North also intends to pursue opportunities to sell Quill products throughout its existing distribution network in Canada.
The total consideration payable on closing of the acquisition by 48North is approximately $2.1-million (U.S.), consisting of the following: (i) $641,000 (U.S.) paid in cash; and (ii) $1,459,000 (U.S.) paid in common shares of 48North at a price of approximately 86 cents per common share. The issue price was calculated based on the volume-weighted average price of the common shares on the TSX Venture Exchange for the 10 trading days immediately prior to the execution of the definitive agreement. In addition, 48North will pay a conditional earnout in common shares, based on overall operating performance of Quill in 2019 and 2020, of up to $3.15-million (U.S.).
In addition to customary closing conditions, the transaction is subject to approval from the TSX-V. The transaction is expected to constitute an expedited acquisition, in accordance with Policy 5.3 of the TSX-V.
About 48North Cannabis Corp.
48North Cannabis is a vertically integrated cannabis company focused on the health and wellness market through cultivation and extraction, as well as the creation of innovative, authentic brands for next-generation cannabis products. 48North is developing formulations and manufacturing capabilities for its own proprietary products, as well as positioning itself to contract manufacture similar products for third parties.
We seek Safe Harbor.
© 2021 Canjex Publishing Ltd. All rights reserved.