TPCO Holding Corp - The Parent Company - (NEO:GRAM) (OTCQX:GRAMF) has signed a definitive agreement to acquire 100% of the equity of dispensary Calma West Hollywood for a total consideration of $11.5 million.
The company said the agreement remains subject to regulatory approvals, including approval by the City of West Hollywood.
The Parent Company said the 3,250 square foot dispensary is one of only 10 stores in the West Hollywood area that is licensed for both delivery and storefront retail.
With more than 3.6 million visitors per year, West Hollywood is situated in the core of the Los Angeles region, surrounded by cultural destinations and tourist attractions in every direction. The Los Angeles metropolitan area also has a cannabis retailer density of one store for every 194,000 people in the region.
The Parent Company said the acquisition of Calma increases its current California retail footprint to four, with two operating locations in San Jose and one in Bellflower. Also, to ensure Calma remains a staple in West Hollywood, the Calma founders will remain involved with the operations of the business.
"We are thrilled to be expanding our retail presence in the iconic West Hollywood region and look forward to continuing to provide our clients with the exceptional selection and retail experiences they've come to expect from us," said Steve Allan, CEO of The Parent Company, in a statement.
"Strategically positioned in a high-traffic, high-population region of Los Angeles, this acquisition enables us to expand our reach to a broader potential audience of consumers and patients with both in-person retail and delivery options."
Allan added: "As we continue to execute on our omnichannel expansion strategy, we will look to evaluate and identify additional strong retail and delivery operators in strategic locations to expand our reach across the state."
Terms of the deal
Under the terms of the agreement, the total consideration of $11.5 million comprises of $8.5 million in cash and $3 million in equity of The Parent Company.
Upon the initial closing, anticipated to take place in the third quarter of 2021, The Parent Company said it will obtain 85% of the equity of Calma upon approval by the City of West Hollywood.
The company added that the transfer of the remaining 15% equity of Calma is expected to occur in 2022. Closing of the Calma transaction is subject to standard closing conditions as well as regulatory review and approval.
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