Next Green Wave Holdings Inc (CSE: NGW) (OTCQB: NXGWF) continues to ride an expansion wave in California, announcing Tuesday that it has reached an agreement to acquire SD Cannabis, a California-based cannabis brand and consumer-product leader, for $27 million.
Shares of Next Green Wave spiked following the news, up 9% at C$0.73 on Tuesday afternoon.
SDC is a premium cannabis consumer-goods, manufacturing and extraction leader with eight leading cannabis brands and 45 cannabidiol and tetrahydrocannabinol products. Combined, it has a global social influencer reach of over 25 million people and with more than 100 million YouTube views.
"The SDC team shares our vision and provides expertise that is synergistic to that of Next Green Wave and to be the number 1 cannabis consumer products goods company in California," said Next Green Wave CEO Leigh Hughes. "Not only does this acquisition give us an array of premium brands associated with key world-renowned influencers to penetrate global markets, it also gives us increased distribution with revenues from sales, along with direct to consumer reach, relationships and specialty extraction methods. Having the opportunity to market through strategic brand partners to millions of validated and loyal followers is a big deal when marketing consumer products."
Next Green Wave is a Vancouver-based company operating in Calfornia that is fully-licensed to conduct operations across the entire value chain: nursery, cultivation, extraction and distribution.
According to Next Green Wave, the total value of the transaction is estimated to be $27 million.
This includes $20.6 million in cash, shares and performance shares to be earned over the next three years, which will be payable in a number of steps, including $600,000 paid at the closure of the transaction (in cash or shares) and $4 million paid on completion of all rights and titles of assets by the issuance of Next Green Wave shares. All cash amounts are in US currency.
Further to this, if certain performance metrics are met, additional consideration may be paid.
"We are excited to join forces with Next Green Wave, which is arguably one of the leading cannabis innovators in California," said Ryan Lange, SDC co-founder. "This transaction will allow the SDC team to capitalize on its decades of cannabis expertise in California and to rapidly expand our brands, distribution channels and manufacturing expertise across the state and into international markets. Next Green Wave brings world-class leadership and coupled with our common values as innovators, we believe by joining forces we can accelerate our proposition to become a serious cannabis consumer product goods company."
SDC is a California leader
SDC specializes in developing extraction and manufacturing methods that focus on maintaining the quality and natural benefits of cannabis.
The team is made up of brand building, cannabis consumer product goods, manufacturing and extraction professionals, that have decades of experience in cannabis in California. SDC has a growing network of retail and online sales channels including 700 Zumiez Inc (NASDAQ:ZUMZ) stores.
SDC has a selection of exclusive licensing relationships with a range of brand partners that cater to the entire cannabis user market, including pets, in California and other parts of the world.
Brand partners include Carey Hart, Loki the Wolf Dog, King Louie, Sketchy Tank, Junkyard LA, Toy Machine Skateboard Co, SD Cannabis, OSS and Thorn St. Beer.
Contact Katie Lewis at [email protected]