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Stem Holdings Acquires Western Coast Ventures To Access California Cannabis Market


Stem Holdings Inc (OTC: STMH) said it executed a definitive agreement to acquire Western Coast Ventures, Inc. in an all-stock deal. The acquisition will allow Stem Holdings to cultivate, process and distribute cannabis across California.

What Happened

The value of the deal is $3.5 million and will be conducted in all stock, with STEM issuing 2 million shares to existing Western Coast Ventures shareholders. After the deal is closed, former shareholders of Western Coast Ventures will own 7.3 percent of Stem's outstanding stock.

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Western Coast Ventures has $2 million in working capital and has established a joint venture with ILCA Holdings. ILCA has received a limited Conditional Use Permit for a Marijuana Production Facility in San Diego, California.

Why It's Important

The joint venture, in which Western Coast Ventures will hold 51-percent interest for an aggregate purchase price of $1.5 million, will operate an advanced cannabis facility, manufacture cannabis-derived products, and distribute cannabis and cannabis products throughout California.

Stem anticipates the construction of the facility, estimated at $3.5 million, will be financed by the joint venture with cash on hand and other non-dilutive sources of income.

The construction of the facility is in progress and is expected to be completed in the fourth quarter of 2019.

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