Alberta’s marijuana cultivator Decibel Cannabis Company Inc (CVE: DB) (OTCMKTS: DBCCF) will substantially enhance its export potential by acquiring Ontario-based grower AgMedica Bioscience Ltd.
Decibel is paying for the Atlas Global Brands Inc (CNSX: ATL) subsidiary with a C$6.3-million-dollar unsecured convertible debenture. AgMedica will be required to wait for the TSX Venture Exchange to approve the deal before converting the debt instrument into Decibel shares.
Decibel anticipates that the 80,000-square-foot facility it is obtaining access to through the transaction will contribute about C$30 million in net revenue next year. Also, C$4 million of EBITDA.
“The AgMedica facility becomes the cornerstone of our international strategy as it allows us to extend our products and brand to the rest of the world,” Decibel chief executive, Benjamin Sze, said.
The addition of an EU-GMP-certified growing operation will enable Decibel to export cannabis to multiple new European markets including Germany, Denmark, Norway and Spain. It will add 5.1 metric tons to Decibel’s flower yield annually and expand the company’s total addressable market by millions.
AgMedica owns Canadian cannabis brands like Snoop Dogg’s D*gg lbs line, Electric Lettuce and Green Seal.
Decibel is also obtaining the pot plant nursery GreenSeal Nursery Ltd through the deal.
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AgMedica’s parent company kicks the bucket
Atlas Global Brands is currently involved in bankruptcy proceedings. The company received creditor protection in June.
Shares will be delisted from the OTC Markets and Canadian Securities Exchange once the market closes on Monday.
The sale of AgMedica and the GreenSeal Nursery is being completed as part of the company’s restructuring process under creditor protection.
Shortly before receiving the protection, Atlas laid off 50 workers at its facility in Gunn, Alberta. The complex was shut down shortly after.
Decibel aims to boost its revenue through the AgMedica acquisition and the improved flower yield and export advantages it will bring with it. The cultivator reported a 22 per drop in net revenue year-over-year in its Q2 results.
Third quarter results will be provided by the company on Nov. 21.
rowan@mugglehead.com
