Green Growth Brands forms committee to commence strategic review » 17:0102/2402/24/20
On February 21, 2020,…
On February 21, 2020, Green Growth Brands implemented a corporate reorganization as part of its cost reduction initiatives. The reorganization effort will save the Company approximately US$4.0M in annual general and administrative costs related to home office operations. "While we are excited by the consumer demand signals we saw in the CBD Business during the quarter ending December 28, 2019, and we remain confident in its future potential, the CBD Business remains in its nascency" said Peter Horvath, Chief Executive Officer of GGB. "With high-potential in the future comes material overhead costs and other obligations in the near term. These near-term overhead costs and other obligations, together with constraints on liquidity, have posed significant challenges that have hindered us from growing the CBD Business to its full-potential. At the same time, our MSO Segment continues to generate positive EBITDA despite constraints on our ability to fully execute our MSO business plan due, in part, to previously disclosed legal challenges in Nevada," added Horvath. "In light of these factors, we have determined it necessary and appropriate to sell the CBD Business and focus on executing our MSO business plan. The board has also formed a special committee to commence a strategic review, which will include consideration of other cost savings measures, designed to position the Company on a pathway to achieve financial stability and ultimately a platform through which we can achieve sustainable profitability and growth. We are committed to significantly reducing our overall operating costs and extending our cash runway while better positioning the Company to refinance its debt and raise additional financing in the future."
Green Growth to sell cannabidiol business to BRN Group » 17:0102/2402/24/20
Green Growth Brands Inc.…
Green Growth Brands Inc. announced that The BRN Group Inc. has agreed to acquire the company's cannabidiol business. The company and an affiliate of BRN have executed a "stalking horse" asset purchase agreement in respect of the CBD Transaction pursuant to which the Purchaser will acquire all of the assets and assume the current liabilities and certain other obligations of the CBD Business. It is anticipated that the Company will hold up to a 20% carried interest in the CBD Business following completion of the CBD Transaction. In connection with the sale of the CBD Business and upon consummation of same, BRN intends to enter into a strategic advisory and services agreement for the CBD Business with an affiliate of Authentic Brands Group LLC. ABG is a brand development, marketing and entertainment company headquartered in New York City. Through the CBD Business, GGB sells CBD-infused personal care and beauty products, along with other categories, to consumers through mall-based kiosk shops, eCommerce and wholesale agreements under the Seventh Sense and Green Lily brands as well as other highly recognizable licensed brands. Pursuant to the terms of the Stalking Horse Agreement, the Company will sell the assets comprising the CBD Business and the Purchaser will assume the current liabilities and certain other obligations of the CBD Business. It is anticipated that the Company will hold up to a 20% carried interest in the CBD Business following completion of the CBD Transaction. The Stalking Horse Agreement includes a 30-day "go shop" period which permits the Company, with the assistance of its financial advisor, to actively solicit, evaluate and enter into negotiations with third parties that express an interest in acquiring the CBD Business. The go-shop period expires on March 25, 2020. The Stalking Horse Agreement also provides for other customary terms for an agreement of this type. A termination fee is payable to the BRN Group in the amount of US$750,000 plus customary expense and deposit reimbursement in the event the Stalking Horse Agreement is terminated by the Company during the Go Shop Period to enter into a superior proposal. The obligations of the Purchaser under the Stalking Horse Agreement have been guaranteed by BRN. In connection with the sale of the CBD Business and upon consummation of same, BRN intends to enter into a strategic advisory and services agreement for the CBD Business with an affiliate of ABG. The BRN Group is a privately held entity that focuses exclusively on the cannabis sector. See "Related Party Transactions and Financial Hardship". The Board of Directors has received an opinion from AltaCorp Capital Inc. to the effect that, as of the date of such opinion, the consideration provided for in the CBD Transaction is fair, from a financial point of view, to the Company, based upon and subject to the assumptions, limitations, qualifications and such other matters as AltaCorp considered relevant.
|Over a week ago|
Cantor initiates 10 cannabis names, sees opportunity after sellofff » 07:3302/1402/14/20
TCNNF, GGBXF, MMNFF, GTBIF, CURLF, CRLBF, AYRSF, ACRGF, HRVSF, ITHUF
Cantor Fitzgerald analyst…
Cantor Fitzgerald analyst Pablo Zuanic launched coverage of 10 U.S. multi-state cannabis operators, saying the stocks are attractively valued with solid underlying industry fundamentals. He rates at Overweight Cresco Labs (CRLBF) and Trulieve Cannabis (TCNNF) and rates at Underweight Green Growth Brands (GGBXF). The analyst is Neutral on the rest of the space, but adds he will "keep an open mind." The Neutral ratings are on MedMen (MMNFF), Green Thumb Industries (GTBIF), Curaleaf Holdings (CURLF), Cresco Labs (CRLBF), Ayr Strategies (AYRSF), Acreage Holdings (ACRGF), Harvest Health & Recreation (HRVSF) and iAnthus (ITHUF). The current regulatory environment in key large U.S. "restricted" states provides a unique opportunity for multi-state operations to build out assets with a limited pool of competitors and be in a position of strength when full legalization comes, Zuanic tells investors in a research note. The boom and bust seen in Canadian stocks has, "unwarrantedly," dragged down U.S. MSOs and "masked strong underlying growth trends," contends the analyst. He believes this creates an attractive investment opportunity in the U.S. space.
Green Growth Brands initiated with an Underweight at Cantor Fitzgerald » 16:1102/1302/13/20
Cantor Fitzgerald analyst…
Cantor Fitzgerald analyst Pablo Zuanic initiated coverage of Green Growth Brands with an Underweight rating.
|Over a quarter ago|
Green Growth reports agreement with American Eagle to sell CBD-infused products » 07:2107/1107/11/19
Green Growth Brands…
Green Growth Brands (GGBXF) announced it has received a purchase order from American Eagle Outfitters (AEO) through which it will sell hemp-derived cannabidiol infused personal care products in nearly 500 of its American Eagle stores and online. The products, which were exclusively developed for American Eagle, include a wide assortment of CBD-infused personal care items such as lotions, muscle balms, and aromatherapy. Sales of the product are expected to begin in October 2019. "We are very pleased to be partnering with American Eagle, a leader in the specialty retail space," said Green Growth Brands CEO, Peter Horvath. "GGB provided the expertise necessary to develop the product formulations and packaging to create a really special line of products."
Green Growth Brands expects to close Moxie transaction within six months » 09:2007/0907/09/19
The Transaction is…
The Transaction is structured to include the formation of GGB LP, a new Ontario limited partnership of which GGB will be the general partner, with the operating companies of GGB being placed under the partnership. Payment of the Purchase Price will be satisfied through the issuance of common shares of GGB and exchangeable limited partnership units in GGB LP as follows: through the issuance of GGB Common Shares to the shareholders of MXY C and MXY D; through the issuance of either GGB Common Shares or Exchangeable LP Units to the unitholders of Moxie; and through the issuance of Exchangeable LP Units to the holders of the Pure Entities. The Exchangeable LP Units are exchangeable into GGB Common Shares on a one-for-one basis for no additional consideration; however, the Exchangeable LP Units may not be exchanged for GGB Common Shares for the first year following the closing of the Transaction. The total number of securities issuable as payment under the Transaction is equal to that number determined by dividing the Purchase Price by the 30-day volume-weighted average price of GGB Common Shares ending on the third trading day prior to the closing such that following the issuance of the GGB Common Shares and Exchangeable LP Units, the former Moxie members, the shareholders of MXY C and MXY D and the holders of the Pure Entities will hold between approximately 30% and 42% of the fully-diluted equity of GGB with the majority of such securities to be subject to lock up agreements for a period of 12 months from the completion of the Transaction with staggered releases. The Agreement may be terminated in certain circumstances including by mutual agreement of the parties; by either party for a significant breach by the other party that would cause the closing conditions not to be met; by either party if the Transaction has not been effected by June 30, 2020; by Moxie, if it does not receive a legal opinion from counsel regarding the United States federal income tax consequences of the exchange of certain units of Moxie for Exchangeable LP Units or, by GGB, if GGB enters into an agreement regarding an acquisition transaction. Subject to the terms and conditions set out in the Agreement, if either party terminates as a result of a significant breach by the other party, the breaching party will pay a termination fee of US$10M or if the Agreement is terminated by Moxie in the event of an Opinion Termination, it will pay GGB a termination fee of US$10 million. If the Agreement is terminated by GGB in the event of an Acquisition Termination, GGB will pay to Moxie a termination fee of US$17.5M. GGB will satisfy payment of its termination fee, in either case, in GGB Common Shares, and Moxie will satisfy payment of its termination fee, in either case, through forgiveness of the Loan and a cash payment. The closing of the Transaction is expected to occur within the following six months, but remains subject to the satisfaction of various closing conditions, including receipt of all necessary regulatory approval for the transfer of the cannabis-related licenses of Moxie by local and state authorities in each of the markets where Moxie's assets and licenses are held; approval from the Canadian Securities Exchange for the listing of GGB Common Shares issuable in connection with the Transaction; that all required securityholder approval for Moxie, MXY C and MXY D is received and certain pre-closing transactions have been effected; that the Lock-Up Agreements have been entered into; there has been no material adverse effect in respect of either Moxie or GGB; and, that all documents required in connection with the transfer of Moxie, MXY C and MXY D securities have been delivered to GGB. There can be no assurance that the Transaction will be consummated. On closing, the controlling members of Moxie will be entitled to nominate two directors of GGB and, in connection with the foregoing, the Company and certain shareholders of GGB, will enter into a nomination rights and voting agreement with respect to matters relating to the nomination and election of such nominees. Management of Moxie will continue to lead the company as part of GGB, with key management joining GGB. As part of the Transaction, Moxie has agreed to make available a loan of US$5M to GGB in order to fund certain pending acquisitions and the parties have agreed to enter into a distribution agreement. The Loan will bear interest at 6% and, if the Transaction is terminated, will be repaid within 12 months of termination. The Distribution Agreement provides that GGB will distribute Moxie CBD products through its kiosk and dispensary network for a period of up to thirty months.
Green Growth Brands to combine with MXY Holdings in $310M transaction » 09:1807/0907/09/19
Green Growth Brands…
Green Growth Brands announced that it has entered into a securities acquisition and contribution agreement, dated as of July 8, 2019, with, among others, MXY Holdings under which a new Ontario limited partnership, of which GGB will be the general partner, will acquire the operating companies of GGB and the issued and outstanding units of Moxie, an arm's length third party, in an all-equity interest transaction. As part of the Transaction, GGB will also be directly acquiring shares of MXY C, and MXY , Delaware entities within the Moxie structure, and interests in two entities, PurePenn LLC and Pure CA, LLC, with which Moxie has current acquisition agreements. The equity purchase price of the Transaction is $310M, and will be satisfied through the issuance of either GGB Common Shares or Exchangeable LP Units. The combination of Moxie and GGB would create one of the first cannabis companies to provide consumers a comprehensive product offering, including both CBD and tetrahydrocannabinol product lines and distribution that runs from mainstream retail to cannabis dispensaries, all led by management with decades of expertise and credibility.