American weed superstore company Planet 13 Holdings Inc. (CSE: PLTH) (OTCQB: PLNHF) is buying a craft cannabis producer in California, expanding its footprint in the Sunshine State.
On Wednesday, the Las Vegas-based firm said it completed an acquisition Next Green Wave for a total of about C$91 million. This follows approval from NGW shareholders last week and subsequent approval by the Supreme Court of British Columbia on Tuesday.
The deal significantly improves Planet 13’s position in California, says co-CEO Larry Scheffler.
“It empowers us to improve margins through vertical integration at our store, enter the wholesale market with our portfolio of award-winning products, and gives us an experienced management team and foundation to continue to expand in California,” he continues in a statement.
Read more: Losses mount for Planet 13 in Q3
Read more: Planet 13 to open California’s biggest weed store
Large, colourful octopus inside Planet 13’s Orange Country superstore. Image via Planet 13
NGW owns and operates a 35,000-square-foot indoor facility in Coalinga, California, which houses its nursery, cultivation, distribution and future packaging business.
The firm expects the deal to increase vertical integration, saying cultivation and production will “serve as the backbone” for its operations in California, and enable the company to add more retail in the state.
Under the deal, each NGW common share has been exchanged for 0.1145 of one Planet 13 common share and US$0.0001 in cash.
And Planet 13 has issued 21.3 million of its shares to former NGW shareholders.
NGW shares are expected to be delisted from the Canadian Securities Exchange at the close of business sometime around Wednesday.
Last July, Plant 13 opened its Orange County cannabis superstore, becoming the biggest dispensary in the state and second in the world behind the firm’s Las Vegas superstore.
Company stock dropped more than 5 per cent Wednesday to $3.34 on the Canadian Securities Exchange.
Follow Kathryn Tindale on Twitter
kathryn@mugglehead.com
