Weekend Unlimited Inc (CSE:YOLO) announced Monday that one of its subsidiaries, Weekend Unlimited Washington LLC, signed a letter of intent to provide processing and distribution facilities to Boggy Boon-branded cannabis company Seven Hills, with an option to acquire Seven Hills.
Under the terms of the agreement, Weekend will provide a loan of up to US$750,000 to Seven Hills in three equal tranches over nine months to upgrade its facilities. It will have the option to acquire 100% of Seven Hills for $1.5 million.
Boggy Boon-branded cannabis is cultivated in a 28,000-square feet facility located in Wenatchee, located in north-central Washington where Weekend's wholly owned subsidiary Orchard Heights Growers is also conveniently located.
“As a result of this arrangement, Boggy Boon will be able to dedicate its operation entirely to cultivation with an anticipated increase efficiency of 40%, with the current year run rate of $2 million growing to $2.8 million," said Weekend Unlimited CEO Paul Chu.
Due to the alliance, Orchard Heights will have more diverse products to offer its customers and will be able to sell Weekend brands to existing 130 Boggy Boon retail accounts.
"The Washington market is mature, and consumers are becoming more loyal to established brands like Boggy Boon,” said Chu.
According to the Chu, Boggy Boon is ranked in the top 5% of all cannabis brands in Washington State.
“We feel this is an ideal partnership where each entity was looking to develop the infrastructure that the other already has in place. By forming this alliance both will accelerate their market penetration and fully utilize existing infrastructure to grow," said Chu.
Boggy Boon is a Tier 3 producer and processor in Wenatchee. It built a custom cannabis greenhouse in 2016 for premium production.
By collaborating with Orchard Heights, Boggy Boon will be able to improve its existing operations and up production by 40% to diversify its product offering in Washington state.
Weekend's facility in Wenatchee will not only provide synergy to boost revenue for both companies, but will also slash operating expenses, thereby increasing profit margins.
Vancouver-based cannabis-focused Weekend Unlimited recently completed its November acquisition of Verve Beverage Company, the maker of both CBD and non-CBD beverages. Verve holds the Champ Energy brand, which gives Weekend an accelerated model to launch into CBD-infused beverages.
Contact Uttara Choudhury at [email protected]