Pot investment group High Hampton Holdings Corp (CSE:HC, OTC:HHPHF) is set to acquire a licensed California cannabis manufacturing company - Mojave Jane.
Based in Coachella, California, the group makes cannabis extracts and concentrates and is a key player in the state's growing cannabis economy.
High Hampton said the deal would:
provide the means to produce high-value white-label and branded extracts for distribution across the California markets produce near-term revenue that will fuel profitability and growth across the High Hampton portfolio Bring experienced executive management and operators to the High Hampton team; Establish a foundation for the full integration of High Hampton's portfolio companies and create the means to achieve substantial growth in the adult-use market and the ability to develop cannabis-based medical/therapeutic solutions that make a difference in people's lives."The acquisition of Mojave Jane represents a cornerstone of our consolidation strategy in California in that it adds a proven cannabis manufacturer to our growing portfolio," said Christian Scovenna, interim chief executive officer of High Hampton.
"Even more important, this acquisition integrates perfectly with our other subsidiaries, and I expect pivotal synergies to develop such as supply chain agreements between Mojave Jane and Caligold, as well as, access to an established distribution network through 8 Points Management.
"Mojave Jane has proven that they can produce high-quality extracts that are valued in the market and that they know how and when to scale their business to meet market demands.
"Mojave Jane also brings revenue to the table to continue to fuel our growth in California's rapidly expanding markets."
Gary Latham, founding partner at Mojave Jane added: "This acquisition provides Mojave Jane with the capital and reach to rapidly expand our capacity, product lines, outlets and revenue, while filling a critical part of High Hampton's plans. Truly a win-win."
High Hampton and Mojave Jane expect to enter a definitive agreement on or before October 31 this year and the acquisition is expected to close by November 16.
The binding LOI (letter of intent) sees the exchange of all Mojave Jane's issued and outstanding member interest for High Hampton shares for a total of around US$$3.5 million.
The High Hampton shares will be issued at a deemed price of US$0.51.
Under the letter of intent, High Hampton will also commit up to US$1.1 million to Mojave Jane for expansion of its manufacturing capacity, marketing, sales and working capital.
Shares eased 3.8% to $0.38 in Toronto.
