Green Growth Brands (CSE: GGB) announced this morning that it will be combining with MXY Holdings in an all-stock US$310 million transaction. Green Growth will remain the public vehicle of the combined entity, with the issuer essentially purchasing MXY Holdings and moving its current GGB assets into a different subsidiary.
MXY Holdings, operating as Moxie, is a currently private multi state operator within the US. It currently features award-winning brands and strong customer loyalty across its network. With operations in California, Nevada, Arizona, Pennsylvania, and New Jersey, the firm currently has products in over 250 dispensaries across the US.
The combination of Moxie and Green Growth Brands is said to create a “360 degree” cannabis company thanks to GGB’s current 61 CBD focused retail kiosks, as well as the new depth the firm will see within its cannabis operations. Combined, the entity will have cannabis operations across nine states, with the potential for it to expand to 16 based on currently in place agreements. Green Growth still remains committed to operating over 200 CBD kiosks throughout the US by the end of the year, allowing the firm to hold significant market share in both lines of business.
“As a ‘360 degree’ cannabis company, we expect to bring an expertise to each segment of the combined business: cannabis dispensaries, vertically-integrated and wholesale CBD and wholesale cannabis consumer products.”Peter Horvath, CEO of Green Growth Brands
The closing of the transaction is expected to occur within the next six months. Final pricing of GGB shares will be based on a 30 day volume weighted average price of Green Growth’s shares on the third day before the closing of the transaction. Minimum and maximum pricing parameters have been put in place, with the range of C$2.71 to C$4.52. Merger termination clauses have been put in place, with the terminating party slated to owe the other party a minimum of US$10 million should they choose to walk away.
As part of the agreement, Moxie is to issue a promissory note to the tune of US$5 million immediately to fund current operations. A distribution agreement is also to be put into place between Moxie and GGB for a term of 30 months.
Little information was given on MXY Holdings itself. No top line revenue figures were given for the firm, nor any other financial data identifying the strength of the company. The only figure provided within the news release consists of the cash position of Moxie, which currently sits at US$39 million.
The transaction between Green Growth Brands and MXY Holdings is considered an arms length transaction with a third party.
Information for this briefing was found via The CSE and Green Growth Brands. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.