TORONTO, Nov. 22, 2019 (GLOBE NEWSWIRE) -- North Bud Farms Inc. (CSE: NBUD) (OTCQB: NOBDF) ("NORTHBUD" or the "Company") is pleased to announce that Bonfire Brands USA (“Bonfire”), a wholly owned subsidiary of NORTHBUD, has signed multiple definitive agreements related to its previously announced letters of intent with the Qlora Group and Monterey Holdings (see September 12, 2019 press release).
- Bonfire Brands USA has finalized the acquisition of an 11-acre property located at 20180 Spence Road Salinas, California from Monterey Holdings Inc. The property currently consists of 300,000 sq. ft. of licensable greenhouse space with 60,000 sq. ft. actively cultivating cannabis and a 2,000 sq. ft. building licensed for distribution. The purchase price of the property is USD$8,000,000 which represents the fair market value of the real estate. The buyer and seller have entered into a seller carry back financing for the full purchase price.
- Bonfire Brands USA has signed a definitive agreement with the Qlora Group for the acquisition of cultivation, processing and distribution licenses associated to the Spence Road property. As part of this acquisition Bonfire Brands USA also acquires all the Intellectual Property (IP) and assets related to the brands California Bud Co and Live For The Day (LFTD). The two brands combined for approximately USD$6,500,000 in unaudited sales over the past 18 months. In consideration for this acquisition Bonfire has assumed a USD$2,500,000 debt note from the Qlora Group. The debt will be settled over a 24-month period through a combination of cash and stock at the discretion of the note holder. Immediately upon signing of the definitive agreement Bonfire will have acquired 80% ownership of the licenses with the remaining 20% to be transferred after approval from the California Cannabis Control and Licensing Bureau.
The buyer will be taking possession of all biological assets including:
- 6000 plants currently in the fifth week of flowering;
- ~ 5000 plants in various stages of vegetative growth;
- ~ 350 Lbs. of dried and harvested flower and trim; and
- 3000 filled vape cartridges of various strains.
“On the heels of the historic adoption of the MORE Act, the NORTHBUD and Bonfire team is extremely proud to have finalized this agreement and how the structure allows for the acquisition to be financed from ongoing cash flow from the acquired business with minimal dilution while allowing the company to acquire what we believe to be exceptionally positioned infrastructure located in the heart of California’s Sun Belt and home to the largest cannabis cultivators in the state,” said Ryan Brown, CEO of NORTHBUD.
This infrastructure will serve as the primary operation for Bonfire Brands USA within the state of California, which is considered to be the largest cannabis market in North America valued at USD$3 billion dollars per year according to Arcview Market Research and BDS Analytics (August 2019).
“We are very pleased with the successful acquisition of the Salinas facility,” said Justin Braune, President of Bonfire Brands USA. “We have been working closely with the cultivation team at Qlora over the past two months and will immediately take over operations to begin driving revenue growth. We anticipate our first harvest within 45 days and have been actively negotiating agreements with distribution and cultivation partners whom wish to leverage our strategic infrastructure through joint venture and subletting agreements. We anticipate closing these transactions in the near future with the goal of having the California operation generating positive cash flow in the near term.”
The Transaction is a significant acquisition but will not result in a “Fundamental Change” pursuant to the policies of the CSE. NORTHBUD will be preparing the necessary corporate and securities filings in order to secure the required approvals for the Transaction.
NORTHBUD has agreed to pay up to 3% in finder fees to arm’s length parties in connection with the closing of the Transaction. The fee is payable in common shares of NORTHBUD.
The closing of the Transaction is conditional on the receipt by the parties of applicable corporate and regulatory approvals including that of the CSE.
About North Bud Farms Inc.
North Bud Farms Inc., through its wholly owned subsidiary GrowPros MMP Inc., is pursuing a license under The Cannabis Act. The Company has built a state-of-the-art purpose-built cannabis production facility located on 135 acres of Agricultural Land in Low, Quebec, Canada. NORTHBUD through its wholly owned U.S. subsidiary, Bonfire Brands USA has acquired cannabis production facilities in California and Nevada. The Salinas, California property is located on 11 acres which currently consists of a 300,000 sq. ft. of licensable greenhouse space with 60,000 sq. ft. actively cultivating cannabis and a 2,000 sq. ft. building licensed for distribution. The Reno, Nevada property is located on 3.2 acres of land which was acquired through the acquisition of Nevada Botanical Science, Inc. a world class cannabis production, research and development facility with 5,000 sq. ft. of indoor cultivation which holds medical and adult use licenses for cultivation, extraction and distribution.
For more information visit: www.northbud.com
Neither the Canadian Securities Exchange (the “CSE”) nor its Regulation Services Provider (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.
Certain statements and information included in this press release that, to the extent they are not historical fact, constitute forward-looking information or statements (collectively, “forward-looking statements”) within the meaning of applicable securities legislation. Forward-looking statements, including those identified by the expressions “anticipate”, “believe”, “plan”, “estimate”, “expect”, “intend”, “may”, “should” and similar expressions to the extent they relate to the Company or its management. This press release contains forward- looking statements including those relating to projected revenue for 2020 from the Qlora cannabis farm being acquired by Bonfire, the timing of the Company’s first harvest from the farm, and the negotiation of cultivation and distribution agreements. Forward-looking statements are based on the reasonable assumptions, estimates, analysis and opinions of management made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances at the date that such statements are made, but which may prove to be incorrect.
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the risk factors included in the Company’s final long form prospectus dated August 21, 2018, which is available under the Company’s SEDAR profile at www.sedar.com. Accordingly, readers should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made. New factors emerge from time to time, and it is not possible for the Company's management to predict all of such factors and to assess in advance the impact of each such factor on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. The Company does not undertake any obligation to update any forward-looking statements to reflect information, events, results, circumstances or otherwise after the date hereof or to reflect the occurrence of unanticipated events, except as required by law including securities laws. This news release does not constitute an offer to sell or a solicitation of any offer to buy any securities of the Company.
FOR ADDITIONAL INFORMATION, PLEASE CONTACT:
North Bud Farms Inc.
VP, IR & Communications
Office: (855) 628-3420 ext. 3