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Australis says its new retail acquisition and distribution partnership will expand its California footprint

The deal will also include Herbs’ recent distribution agreement with Eaze, California's largest legal cannabis delivery and distribution company

Australis says its new retail acquisition and distribution partnership will expand its California footprint
The 1g cartridges are expected to be available on the market later this month

Australis Capital Inc., also known as Audacious, has entered into a binding terms sheet to acquire 100% of the issued and outstanding shares of BW Macaw Group Inc, which is also referred to as “Herbs”. 

The deal will also include Herbs’ recent distribution agreement with Eaze, California's largest legal cannabis delivery and distribution company. Additionally, two California-based contract manufacturers will commence production of the company's products. 

Aside from the retail license that is part of the contemplated transaction, Herbs' business license also includes the ability to cultivate, manufacture (production of derivatives and edibles), and distribute cannabis products.

READ: Australis reduces Body and Mind stake with the sale of 9.9 million shares

The acquisition is subject to both companies entering into a definitive agreement, as well as receipt of all appropriate San Jose municipal and State approvals, including the customary security clearances. 

“Audacious looks forward to working with the San Jose municipal authorities to obtain the final approvals required towards the completion of this transaction,” read the company press release. 

Australis has agreed to pay US$5 million in stock, with the deemed value calculated using a 10-day volume-weighted average price.  

The acquisition is part of the company’s larger California expansion strategy, which will be enhanced through the distribution agreement with Eaze. 

Currently, Herbs is one of 16 dispensaries in San Jose, the state’s third-largest city.  

“Daytime population within a ten-mile radius from the dispensary is 1.7 million people, equating to just below one dispensary per 100,000 people. This compares favorably to the state's average at around two,” the company said. 

While, Eaze is the largest legal delivery service in California and Michigan, with over 800,000 registered customers and more than 7,000,000 million deliveries completed.  

Additionally, Audacious plans to distribute its value line of Provisions disposable vapes, as well as its 2oz, 100mg THC LOOS shots, through both the dispensary and on the Eaze menu. 

The 1g cartridges are expected to be available on the market later this month.

"We are very excited about our expansion in California through a compellingly valued transaction that sees us establish a brick-and-mortar presence in an underserved market, while teaming up with Eaze, one of the marquee names in the industry with over 800,000 registered customers," CEO Terry Booth said in the statement.

He went on to say: "Consequently our Eaze partnership, we will be able to provide consumers throughout California with access to our award-winning brands, including our LOOS shots and our new 1g disposable cartridge format, which will be available in our dispensary and on the Eaze menu shortly. Additionally, coming with a license allowing manufacturing and cultivation, this transaction, once closed, will provide us with the option to scale up operations throughout the value chain to capture higher margins. The transaction will accelerate our revenue growth, while reflecting our ongoing execution towards becoming a tier one MSO."

Contact the writer at georgia@proactiveinvestors.com

Follow her on Twitter @MissInformd

 

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