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SOL Global Investments Corp
Symbol SOL
Shares Issued 47,960,581
Close 2019-05-15 C$ 2.51
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SOL Global to acquire seven California pot companies

2019-05-16 09:26 ET - News Release

Mr. Brady Cobb reports


SOL Global Investments Corp. has entered into letters of intent to acquire ECD Inc., which operates as Northern Emeralds, an industry-leading cannabis cultivation, processing and distribution company headquartered in Humboldt county, California, as well as six licensed dispensary companies in California that will subsequently operate under the nationally recognized One Plant brand. SOL Global intends to open One Plant-branded dispensaries throughout California (a total of 20 operating and licensed dispensary companies), Florida and Michigan.

SOL Global intends to establish a new separate cannabis multistate operator (MSO) by combining its proposed acquisitions of Northern Emeralds and the six One Plant California dispensaries with its previously announced proposed acquisition of Michigan-based MCP Wellness Inc. and the company's existing Florida-based cannabis company, 3 Boys Farms LLC. If the proposed acquisitions are completed, SOL Global intends to pursue a "going-public transaction" of the MSO by way of an initial public offering, reverse takeover, plan of arrangement or other similar transaction that will result in the listing of the shares of the MSO on a recognized Canadian stock exchange.

Pursuant to the terms of a binding letter of intent between the company and ECD, the company will acquire Northern Emeralds for an aggregate purchase price of $120-million (U.S.), less certain adjustments. The purchase price will be satisfied by the issuance of common shares in CannCure Investments Inc., an affiliated entity of the company, or such other subsidiary or affiliate of the company. The transaction remains subject to: the execution of a definitive purchase agreement; satisfactory due diligence by the company; and the receipt of all necessary governmental, corporate and regulatory approvals. Closing is expected to occur on or about Aug. 1, 2019, or as otherwise agreed to by the parties. There are no assurances that the acquisition of ECD will be completed as proposed or at all.

Pursuant to the terms of a binding letter of intent between the company and Three Habitat Consulting Holdco Inc., SOL Global will acquire six California dispensary companies from Three Habitat for an aggregate purchase price of $17-million (U.S.), subject to adjustment, based on the achievement of certain postclosing milestones. The purchase price will be satisfied by $5-million (U.S.) in cash and the remaining balance in common shares of CannCure, or such other affiliate or subsidiary of the company determined by the parties. The transaction remains subject to the execution of a definitive purchase agreement as well as the receipt of all necessary governmental, corporate and regulatory approvals. Closing is expected to occur on or about Aug. 1, 2019, or as otherwise agreed to by the parties. There are no assurances that the proposed transaction with Three Habitat will be completed as proposed or at all.

If completed, the two acquisitions will expand the company's footprint to include robust, vertically integrated operations in three of the top 10 cannabis markets by revenue in the United States, as forecasted by ArcView market research.

Northern Emeralds is a premiere cannabis cultivator, producer and distributor located in the Emerald Triangle in Humboldt county, California, one of the world's most renowned cannabis cultivation zones and the self-described birthplace of the American cannabis movement. Humboldt county is also home to the cannabis industry's most advanced genetics and cultivation and postharvest processing techniques, and the team at Northern Emeralds prides itself on its signature trademarked cannabis flower strains, including its top-ranked Titan OG, OK Sapphire Kush and Durban Poison strains. Northern Emeralds' operations are spread among five distinct facilities in Humboldt and will total a combined 35,000 square feet of ecofriendly cultivation, production and distribution facilities. The company's cultivation capacity for its best-in-class cannabis flower products totals more than 16,000 pounds per year. Northern Emeralds' industry-leading genetics, cultivation, processing and production techniques will be integrated across all of the MSO's planned One Plant-branded dispensaries in Florida, Michigan and California alongside existing product lines and strains.

One Plant is a chain of nationally recognized cannabis dispensaries, with additional planned locations throughout California, Florida and Michigan. One Plant dispensaries are designed to offer both new and returning consumers an accessible and welcoming retail experience, complete with a robust multimedia-driven educational platform for easy purchasing. One Plant dispensaries will also feature some of the best-known brands in the cannabis industry, including products from Northern Emeralds, Honey, Plus Brands, Venice Cookie Company, Old Pal, DomPen, Big Pete's, Biscotti and Cannabis Quencher, among many others. One Plant intends to open nine dispensaries throughout California in 2019, as well as an additional 11 dispensaries in the state in 2020, and is currently in various development and approval stages for dispensary locations in Monterey county, Palm Springs, Contra Costa, Atwater, Goleta and Placerville, among others. One Plant intends to open five dispensaries in Florida in 2019 and an additional eight dispensaries in Florida in 2020. The MSO, once it is fully established, intends to: convert three existing Michigan dispensaries to One Plant-branded locations in 2019; open an additional four dispensaries in Michigan in 2019; and open an additional six locations in Michigan in 2020. In total, One Plant intends to have 46 dispensary locations in operation throughout the three states by the end of 2020.

SOL Global intends to announce in a further press release the MSO's management team to oversee the operations in Florida, California and Michigan. This management team will be selected from among top executives and industry players at leading cannabis and consumer product goods companies.

"Simply put, Northern Emeralds is the most advanced cannabis producer in the most famous cannabis-producing region in the world, and SOL Global is thrilled to integrate the Northern Emeralds family within our comprehensive U.S. cannabis strategy via the MSO," commented Brady Cobb, chief executive officer of SOL Global. "This partnership enables SOL Global to deploy Northern Emeralds' best-in-class genetics, method and data-based cultivation, and processing operations across our entire portfolio. This integration, combined with the carefully curated retail concept and dispensary locations offered by One Plant -- as well as SOL Global's roster of consumer-favourite brands -- further cements SOL Global's, and ultimately the MSO's, position as a vertically integrated, multistate powerhouse that is poised to drive substantial revenue growth in three of the most important cannabis markets in the United States."

"I am thrilled to join the Northern Emeralds team and brands with the SOL Global and One Plant families," commented Cody Stross, founder and chief executive officer of Northern Emeralds. "We are passionate about 'sharing with the world' that which we started in a garage in Humboldt county over eight years ago. We cultivate the 'highest intent of the seed,' and I can think of no better partnership to realize this dream."

Spending on legal cannabis in California reached a total of $2.5-billion in 2018 and is expected to grow to as much as $5.6-billion by 2022, according to leading cannabis research firm ArcView. ArcView also predicts that spending on legal cannabis in Florida and Michigan could reach $1.6-billion and $1.4-billion, respectively, by 2022.

About SOL Global Investments Corp.

SOL Global is an international investment company with a focus on, but not limited to, cannabis and cannabis-related companies in legal U.S. states, the hemp and cannabidiol marketplaces, and the emerging European cannabis and hemp marketplaces. Its strategic investments and partnerships across cultivation, distribution and retail complement the company's R&D (research and development) program with the University of Miami. It is this comprehensive approach that is positioning SOL Global as a future front-runner in the United States' medical cannabis industry.

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