Mr. Bill Kulczycki reports
GOLDEN LEAF HOLDINGS ANNOUNCES TERMINATION OF AGREEMENT TO ACQUIRE A MULTI-USE A SWEET 16A LICENSE AND CERTAIN OTHER ASSETS IN SAN JOSE, CALIFORNIA
Golden Leaf Holdings Ltd. has agreed with the seller of the combined cultivation, production and retail licence in San Jose, Calif., to terminate the contingent asset purchase agreement for the company to acquire the multiuse Sweet 16 licence, as well as certain other assets. The agreement was originally announced on Aug. 17, 2018.
Bill Kulczycki, president and chief executive officer of Golden Leaf, said: "The decision to terminate this agreement comes down to economics for Golden Leaf. The decision to terminate in no way reflects the seller or the seller's business. Back when this deal was originally signed, there were limited M&A opportunities for entry into California of the size that Golden Leaf wanted to take on. Prior to closing, we were managing the facility under an interim consulting agreement that gave us further insights into the operations. This allowed us to conduct further due diligence and we learned that we would have to significantly commit our available management time and resources to make this a successful proposition. Had we done so, we would have risked achieving our overall corporate return on investment (ROI) goals. Going forward, we plan to enter new jurisdictions by first leveraging existing resources and the assets and infrastructure of strategic partners. Once we confirm traction, we can commit an appropriate amount of capital to build our own infrastructure. My immediate focus for Golden Leaf is one of disciplined growth, balanced between assessments of risk and cash flow returns that drive shareholder value creation, with the goal of achieving profitability in the near term. California remains a strategic jurisdiction for Golden Leaf."
About Golden Leaf Holdings Ltd.
Golden Leaf is a Canadian company with operations in multiple jurisdictions including Oregon, Nevada and Canada, with cultivation, production and retail operations built around recognized brands. Golden Leaf distributes its products through its branded Chalice Farms retail dispensaries, as well as through third party dispensaries.
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