- Plus Products has the right – but no obligation – to buy Emerald Bay Wellness and the business assets of Emerald Bay Extracts
- Emerald Bay Extracts has been one of Plus Products’ largest suppliers for the past year
- If the option is exercised, PLUS will reap the benefits of vertical integration and directly interact with the cannabis plant
Plus Products Inc. (CSE: PLUS) (OTCQX: PLPRF), manufacturer and marketer of cannabis food products, has purchased an option to buy California-based cannabis oil manufacturer Emerald Bay Wellness LLC and the business assets of Emerald Bay Extracts. The option specifies cash and stock consideration for PLUS to acquire one of its largest cannabis oil suppliers and a supply partner for more than a year (http://nnw.fm/atAg9).
In consideration for the option, PLUS intends to deliver a $400,000 secured loan to Emerald Bay Extracts. If the acquisition option is exercised, terms call for the issuance of approximately 1.2 million subordinate voting shares of PLUS and $250,000 in cash; in addition, Emerald Bay would not be required to repay the original loan. Some 70 percent of the deal’s consideration would be subject to performance revenue, which totals almost $28 million over a two-year, earn-out period (http://nnw.fm/atAg9).
“We targeted this acquisition because it allows us to reap the benefits of vertical integration while maintaining a focus on product manufacturing,” PLUS CEO Jake Heimark stated in a news release (http://nnw.fm/atAg9). “Ultimately, this is a rare opportunity to improve quality control, cut costs and grow revenues all at the same time.” Heimark added that acquiring Emerald Bay would give PLUS the opportunity to “directly interact with the cannabis plant.”
If exercised, the option would give Plus Products in-house cannabis extraction capabilities that could improve quality control and raise gross margins on its core edibles business. Exercising the option could also create a new revenue stream and product development capabilities.
San Mateo, California-based PLUS is a cannabis-infused branded products manufacturer selling to regulated medicinal and adult-use recreational markets in California and Nevada. PLUS is focused on building the largest cannabis brand by growing organically and through acquisitions.
For more information, visit the company’s website at www.PlusProducts.com
NOTE TO INVESTORS: The latest news and updates relating to PLPRF are available in the company’s newsroom at http://nnw.fm/PLPRF
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