Connect with us

Hi, what are you looking for?

Tuesday, Dec 7, 2021
Mugglehead Magazine
Cannabis & psychedelics industry news based in Vancouver, B.C.
  • Loading stock data...

Business

TGOD set to buy Galaxie Brands for $22M

The transaction is expected to close around Nov. 15

TGOD set to buy Galaxie Brands for $22M
Galaxie is a maker of three Canadian cannabis brands, and offers services to other producers. Image via Galaxie

Canadian producer The Green Organic Dutchman Holdings Ltd. (CSE: TGOD) (US-OTC: TGODF) says it’s entered a deal to buy competitor Galaxie Brands, in a play to expand its product portfolio and distribution footprint.

In a statement Tuesday, TGOD said it will acquire all issued and outstanding shares of Galaxie for an initial $21 million in stock, while also assuming $1.3 million in Galaxie shareholder loans, which accrue no interest until Jan. 31, 2022.

Sellers of the Galaxy shares are also entitled to earn up to $15 million in additional TGOD shares, subject to “certain financial milestones” by Dec. 31, 2022. The transaction is set to close around Nov. 15, 2021.

Currently, Galaxie makes Cruuzy, a brand of high-potency flower and concentrates, and GRx, a medical cannabis brand and seller to patients. It provides third-party services to other Canadian companies, and is in an exclusive joint venture to produce Wyld, a popular American edibles brand.

When the deal closes, TGOD says it will benefit from improved regional distribution across Canada, providing product expansion capabilities into British Columbia for its house and Highly Dutch brands, as well as into Quebec for Galaxie’s Cruuzy brand, which is made for “emerging cannabis enthusiasts.”

“The combined entity will leverage TGOD’s unique quality organic platform and cultivation capabilities and Galaxie’s differentiated infused pre-rolls and full melt vapes,” reads the statement.

The firm’s product listings will expand to 215 from 157.

Galaxie and its 26,000-square-foot Ontario facility will become a wholly owned subsidiary under the deal. The companies expect various cost synergies resulting from the deal.

TGOD says the acquisition will accelerate its entry into the U.S. market. In September, the company said it was voluntarily delisting from the Toronto Stock Exchange to enter stateside cannabis markets.

Read more: TGOD voluntarily delists from TSX to enter US market

Galaxie CEO Angust Footman will join TGOD’s board as chairman, while the former company’s president, Olivier Dufourmantelle, will join as president of U.S. operations and director. TGOD’s current chairman Jeff Scott will be lead director of the board.

CEO Sean Bovigdon will continue to lead the company.

Footman is the former founder of Park Lane Farms, an early licensed producer of medical cannabis, which was sold to Canopy Growth Corp. (TSX: WEED) (Nasdaq: CGC) in 2014. He then worked for Canopy for a number of leadership roles.

Previously, Dufourmantelle was COO of venture capital firm Canopy Rivers Inc., and COO of Canopy Growth.

“We believe our complementary brands and consumer bases will result in stronger revenues and overall financial performance for TGOD, while preparing for a future expansion to the U.S.,” Bovingdon said in the statement.

Footman says he and his peers are thrilled to join the TGOD team.

“Beyond complementary brands and products, we share with the TGOD team a focus on environmental stewardship, social responsibility and sound governance,” he said.

 

Follow Mugglehead on Twitter

Like Mugglehead on Facebook

Follow Nick Laba on Twitter

nick@mugglehead.com

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Health and Safety

Science doesn't know yet, but one psychedelic researcher is chasing clues to see if it can

Canada

As more medium-to-small producers came into play this year, great weed started hitting legal shelves at fairer prices

Culture

Punishments for possession include caning and the death penalty. Despite a global trend of reform, The Fine City remains staunch in its anti-drug stance

Analysis

While legal weed businesses decry enforcement of their accounts, the platform says it's keeping its all-ages community safe