10:08:47 EST Sat 02 Dec 2023
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Harborside Inc
Symbol HBOR
Shares Issued 39,525,407
Close 2022-03-01 C$ 0.68
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Harborside closes Urbn Leaf acquisition, appoints CEO

2022-03-01 20:55 ET - News Release

Mr. Matthew Hawkins reports


Harborside Inc. has completed the previously announced acquisition of UL Holdings Inc. (Urbn Leaf), a leading California cannabis retailer with a dominant position in Southern California. Ed Schmults has been appointed as chief executive officer and a director of Harborside, effective immediately.

Pursuant to the terms of the definitive agreement announced on Nov. 29, 2021, Harborside acquired 100 per cent of the equity interests of Urbn Leaf through the issuance of 60 million subordinate voting shares (SVSs), and the restructuring and assumption of debt (the UL acquisition).

In addition to acquiring Urbn Leaf, Harborside is also working to complete the previously announced acquisition of LPF JV Corp. (Loudpack). Both the UL Acquisition and the Loudpack acquisition were overwhelmingly approved by Harborside shareholders at a special meeting of shareholders held on Feb. 22, 2022. The Loudpack acquisition is expected to close on or around March 15, 2022. Harborside will officially be renamed StateHouse Holdings Inc. shortly after the closing of the Loudpack acquisition.

"Today's milestone gets us one step closer to the creation of StateHouse, a new leader in California's cannabis sector," said Matthew Hawkins, chairman of the board of directors and previously interim chief executive officer of Harborside. "We are grateful to the entire Urbn Leaf team that worked with us to finalize this transaction, including its seasoned CEO, Ed Schmults, who has been appointed as CEO and a director of Harborside."

"This sets a strong course forward as we navigate a competitive and evolving cannabis market in California," said Mr. Schmults. "The combined assets of Urbn Leaf and Harborside provide an excellent opportunity for shareholders and set the stage for the addition of Loudpack. We believe that StateHouse will be one of the largest and most sophisticated cannabis platforms in the state of California with superior retail, brands, processing, manufacturing, distribution and cultivation. This is a resilient platform for growth as a consolidator of California's cannabis industry and supports enhanced career and business opportunities for everyone in the StateHouse ecosystem."

The appointment of Mr. Schmults to the board fills a vacancy created by the previously announced resignation of Alexander Norman. Mr. Schmults has more than 30 years of experience in global branded consumer products, omnichannel retail, product development, finance, operations, information technology, and green and socially responsible businesses. He held CEO roles at FAO Schwarz and Wild Things Gear, and chief operating officer roles at Patagonia and Red Envelope, following a position in investment banking at Goldman, Sachs & Company.

Harborside also announced that Will Senn has been appointed chief corporate development officer of the company. Mr. Senn, who was named one of the top 100 most influential people in the cannabis industry by High Times, founded Urbn Leaf in 2017 and has been involved in several cannabis ventures over the last 16 years. He also created a number of successful industry trade associations, including the United Medical Marijuana Coalition, Patient Care Association and the Global Alliance for Cannabis Commerce.

Concurrent with the closing of the UL acquisition, the company entered into lock-up agreements with certain shareholders of Urbn Leaf in respect of the SVSs received by such shareholders. Pursuant to the Urbn Leaf lock-up agreements, the Urbn Leaf locked-up shareholders have agreed not to sell, assign or otherwise transfer the SVSs received. The restrictions lapse in three instalments, with each one-third of the SVSs released from the restrictions six months, 12 months and 18 months from today, respectively.

ATB Capital Markets Inc. and Stoic-Solidum Advisory acted as financial advisers to Harborside. Aird & Berlis LLP and Cassels Brock & Blackwell LLP acted as the Canadian legal counsel and Duane Morris LLP acted as the United States legal counsel to Harborside. PI Financial provided a fairness opinion on the UL acquisition to Harborside. PGP Capital Advisors LLC acted as a financial adviser and Burns & Levinson LLP acted as the United States legal counsel to Urbn Leaf.

About Harborside Inc.

Harborside, a vertically integrated enterprise with cannabis licences covering retail, major brands, distribution, cultivation, nursery and manufacturing, is one of the oldest and most respected cannabis companies in California. Founded in 2006, Harborside was awarded one of the first six medical cannabis licences granted in the United States. Today, the company operates 11 major dispensaries covering Northern California and Southern California, and one in Oregon, as well as a manufacturing facility in Oakland, Calif., distribution facilities in San Jose and Los Angeles, Calif., and an integrated cultivation/production facility in Salinas, Calif. Harborside is a publicly listed company, trading on the Canadian Securities Exchange under the ticker symbol HBOR and the OTCQX under the ticker symbol HBORF. The company continues to play an instrumental role in making cannabis safe and accessible to a broad and diverse community of California and Oregon consumers.

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