TORONTO, Aug. 23, 2019 /CNW/ PRESS RELEASE - 48North Cannabis Corp. is pleased to announce that it has entered into a definitive agreement dated August 22, 2019 to acquire Rare Industries, Inc. ("Quill"), a U.S. multi-state Vape Technology brand with product distribution in Oregon and Washington and near-term expansion plans for California and Nevada. The acquisition marks 48North's first foray into the United States.
Quill, a multi-state vape product manufacturer, specializes in the development of easy-to-use, controlled-dosage and health-focused disposable vape pens.
Quill distributes its unfinished branded proprietary vape delivery hardware to licensed cannabis processors who finish the products (including by filling the hardware with cannabis extracts) and distribute the finished products to licensed cannabis retailers. Quill is not itself engaged in the cultivation, distribution or possession of cannabis in the United States.
This year, in addition to Quill's established products, the company is launching a full-spectrum, hemp based, CBD-specific, internationally distributed, all-in-one vaporizer pen. As a result, 48North-owned products will now have multi-state distribution and the ability to be licensed globally, where legally permitted.
"48North recognizes the importance of entering the burgeoning U.S market. I believe that authentic brands and next-generation products distributed at scale, particularly in the emerging U.S. market, will be one of the major keys to success in the cannabis industry," said Alison Gordon, co-CEO of 48North.
"Without question, the Quill suite of products aligns closely with 48North's growing portfolio of brands. This acquisition marks a critical step in the Company's goal to become the trusted leader in the development, manufacturing and distribution of next-generation cannabis products and brands," Ms. Gordon continued.
"48North's industry-leading focus on next-generation cannabis products and its brand-first consumer strategy will undoubtedly elevate Quill, its brand and products to the next-level. The U.S-based Quill team is eagerly looking forward to joining with 48North's experienced and dedicated management team," said Ian Van Vaughan Shaughnessy, co-founder of Quill.
48North intends to leverage Quill's expanding distribution network to accelerate the distribution of the Company's brand portfolio into the United States. 48North also intends to pursue opportunities to sell Quill products throughout its existing distribution network in Canada.
The total consideration payable on closing of the Acquisition by 48North is approximately USD$2.1 million consisting of the following: (i) USD$641,000 paid in cash; and (ii) USD$1,459,000 paid in common shares of 48North at a price of approximately $0.86 per Common Share. The Issue Price was calculated based on the volume weighted average price of the Common Shares on the TSXV for the 10 trading days immediately prior to the execution of the Definitive Agreement. In addition, 48North will pay a conditional earn-out in Common Shares based on overall operating performance of Quill in 2019 and 2020 up to USD$3.15 million.
