$OGI Booming Supply and Demand Fueling Growing Cannabis M&A

Palm Beach, FL – June 12, 2019 – A recent article looking at what changes 2019 may bring to the global cannabis market projected that mergers and acquisitions will redefine the Marijuana Sector in 2019. Owners of well known brands, from alcohol to sunscreens, have seen that adding a CBD infused variety of their popular brands increases sales. Now everyone will want to have reliable sources to make sure they have enough supplies to meet the demand they hope will be coming in this year.  The article said: “The cannabis sector is beginning to snowball and… the global legal cannabis market is predicted to be worth $146.4 billion by 2025… (companies) will have to compete with existing operators and other entrants interested in the ancillary cannabis sectors…” to lock up enough projected supplies of CBD to add to their product lines.   Cannabis, alcohol and tobacco companies represent natural partnerships. Beverage companies are particularly interested in marijuana infused beverages, a market that is predicted to be worth $600 million in the US alone by 2022.   Active companies in the industry making moves to ready that include:  IONIC Brands Corp., (CSE: IONC), OrganiGram Holdings Inc. (NASDAQ: OGI) (TSX-V: OGI.V), Plus Products Inc. (CSE: PLUS) (OTCQB: PLPRF), Planet 13 Holdings Inc. (CSE: PLTH.CN) (OTCQX: PLNHF), Cresco Labs Inc. (CES: CL.CN) (OTCQX: CRLBF).

The article continued: “As the global cannabis markets continue to grow and as the population continues to embrace CBD infused products, it is inevitable that non-cannabis companies with worldwide distribution networks will look to partner with cannabis companies to add CBD infused products to their existing brands. Companies like tobacco and alcohol may be some of the biggest players.”  And they will be competing with all the other well established brand owners from dog food, coffee, edibles, lotions, non-alcoholic beverages, restaurants and all the other verticals wanting to get in on the ‘infusion’ train. It should be a heck of a ride!

IONIC Brands Corp., (CSE: IONC) BREAKING NEWS:  IONIC Brands is pleased to announce that it has completed the acquisition of Vegas Valley Growers North (“VVG”) located in Las Vegas, Nevada, previously announced on April 2, 2019.  VVG is a vertically-integrated, cash flow positive opportunity with a projected 2019 revenue of US$6.6 million, expected gross profits of US$3.1 million and EBITDA of US$2.0 million.

According to Arcview Market Research and Nevada State Department of Taxation, medical and adult-use spending on cannabis is projected to be over US$400 million in 2019 and US$500 million in 2020.  Sales records were set during the first six months of 2018 where Nevada sold more than US$195 million in cannabis products compared to US$67 million in Washington State and US$114 million in Colorado in the same period.

IONIC BRANDS Chairman and CEO John Gorst commented, “The Nevada cannabis market is one of the cornerstone markets in the U.S. for building cannabis brands. With over 42 million visitors to Las Vegas per year, the VVG acquisition will provide our Ionic^TM vape and Zoots^TM edibles brands valuable exposure to national and international cannabis consumers. The VVG acquisition includes the popular Nevada vape brand: “Vegas M Stick”.  VVG offers Ionic Brands vertically integrated operations and distribution into over 75% of Nevada stores.” VVG’s CEO, Mitch Wilson commented that, “IONIC vape pens are the perfect complement to the Vegas M Stick. Together, these luxury brands are set to have a massive presence in the Nevada market for years to come.”

The VVG acquisition includes the lease for a 1,700 square foot production facility, situated on 3.42 acres of land.  VVG is currently building a 60,000 square foot manufacturing facility with expected completion date of Q3 2019.  A second 80,000 square foot facility is planned for Q4 2019. The VVG acquisition also includes four state licenses in hand for cultivation and manufacturing for both medical and recreational cannabis. The applications for the medical and recreational cannabis distribution licenses are being processed and are anticipated to be granted in Q2 2019.  In 2018, VVG revenues were US$2.6 million, with an EBITDA of US$0.8 million. VVG’s flagship product is the Vegas M Stick and the Reno M Stick branded vape pens that have current market penetration of over 75% of stores in Nevada.  The Company expects to increase sales of Ionic branded products by leveraging off VVG’s existing distribution pipeline and introduce various Ionic product SKUs to this distribution channel.

The total purchase price for VVG is US$8,870,000 (C$11,885,800) that includes a cash payment of US$7,620,000 (C$10,134,600), and 2,814,180 common shares of the Company at $0.5952 per share for an aggregate total value of USD $1,250,000 (C$1,675,000). The issuance of shares is subject to approval by the Board of Directors and the CSE.   Read this entire announcement  for IONC at:     https://www.financialnewsmedia.com/news-ionc/   

Additional industry related developments from around the markets:

OrganiGram Holdings Inc. (NASDAQ: OGI) (TSX-V: OGI.V) a leading licensed producer of cannabis and extract-based products, recently announced it has been selected as one of the four Canadian launch partners of PAX Era, the premium oil vaporizer created by PAX Labs, Inc., a leading consumer technology brand in the design and development of premium vaporizers for dry flower and concentrates, when concentrates become legal in Canada later this year.

Much like Organigram’s own Edison Cannabis Co. brand, the PAX portfolio features disruptive, industry-leading technology, on course to redefine the experience of vaping in Canada – and around the world.

Plus Products Inc. (CSE: PLUS) (OTCQX: PLPRF) recently announced that it has acquired an option to purchase Emerald Bay Wellness LLC, a California-based cannabis oil manufacturer. The option grants PLUS the irrevocable right, but not the obligation, to purchase all of the business assets of Emerald Bay Extracts for cash and stock consideration.

“Acquiring Emerald Bay would give PLUS the opportunity to directly interact with the cannabis plant as we work to unlock the many benefits it is capable of delivering,” says Jake Heimark, Co-founder and CEO of PLUS. “We targeted this acquisition because it allows us to reap the benefits of vertical integration while maintaining a focus on product manufacturing. Beyond the benefits of internalization, we believe that the team at Emerald Bay, possess the professionalism and know-how to rapidly scale their wholesale oil business under our umbrella of resources. Ultimately, this is a rare opportunity to improve quality control, cut costs, and grow revenues all at the same time.”

Planet 13 Holdings Inc. (CSE: PLTH.CN) (OTCQX: PLNHF) a leading vertically-integrated Nevada cannabis company, recently announced it has signed a binding letter of intent (“LOI”) to acquire a cannabis sales license and lease for a dispensary (the “Dispensary”) in Santa Ana, California , a part of the Greater Los Angeles Region – home to 13.2 million people – from Newtonian Principles, Inc. (“Newtonian”). Planet 13 will pay Newtonian $6 million in cash and 2,039,808 Class A Restricted Shares valued at $4 million upon Planet 13 receiving final state and local regulatory approvals to transfer the operating entity after Newtonian opens its dispensary. As of March 31, 2019 , Planet 13 had $20 million in cash, leaving it well capitalized to execute on growth opportunities.

Cresco Labs Inc. (CES: CL.CN) (OTCQX: CRLBF) one of the largest vertically integrated multistate cannabis operators in the United States, recently provided an update on its acquisition (the “Transaction”) of CannaRoyalty Corp. d/b/a Origin House (CSE: OH-OTCQX: ORHOF).

Under the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act”), Cresco Labs is required to file a notification to U.S. antitrust authorities and observe a waiting period before completing the Transaction. On June 10, 2019, pursuant to the HSR Act, the Company received a request for additional information (the “Second Request”) from the United States Department of Justice Antitrust Division (the “Department of Justice”). The Second Request extends the HSR Act waiting period for up to 30 days after Cresco Labs and Origin House have each substantially complied with the Second Request, unless that period is extended voluntarily by the parties or terminated sooner by the Department of Justice.

 

DISCLAIMER:  FN Media Group LLC (FNM), which owns and operates FinancialNewsMedia.com and MarketNewsUpdates.com, is a third party publisher and news dissemination service provider, which disseminates electronic information through multiple online media channels.  FNM is NOT affiliated in any manner with any company mentioned herein.  FNM and its affiliated companies are a news dissemination solutions provider and are NOT a registered broker/dealer/analyst/adviser, holds no investment licenses and may NOT sell, offer to sell or offer to buy any security.  FNM’s market updates, news alerts and corporate profiles are NOT a solicitation or recommendation to buy, sell or hold securities.  The material in this release is intended to be strictly informational and is NEVER to be construed or interpreted as research material.  All readers are strongly urged to perform research and due diligence on their own and consult a licensed financial professional before considering any level of investing in stocks.  All material included herein is republished content and details which were previously disseminated by the companies mentioned in this release.  FNM is not liable for any investment decisions by its readers or subscribers.  Investors are cautioned that they may lose all or a portion of their investment when investing in stocks. For current services performed FNM has been compensated forty six hundred dollars for news coverage of the current press release issued above by IONIC Brands Corp. by a non affiliated third party.  FNM HOLDS NO SHARES OF ANY COMPANY NAMED IN THIS RELEASE.

This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” describe future expectations, plans, results, or strategies and are generally preceded by words such as “may”, “future”, “plan” or “planned”, “will” or “should”, “expected,” “anticipates”, “draft”, “eventually” or “projected”. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company’s annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and FNM undertakes no obligation to update such statements.