Heritage Cannabis Buys Premium 5 'To Expand Its Reach'

Heritage Cannabis Holdings Corp. CANN HERTF has finalized its purchase of Premium 5 Ltd., a Canadian cannabis company specializing in full-spectrum concentrates.

The Toronto-based cannabis company highlighted several strategic benefits coming from this acquisition:

• Expanding its market reach - Premium 5 products are already reachable in eight provinces and that this is the only concentrate brand available across the country;
• Broadening its product offering - Premium 5 is known for having the biggest concentrate product portfolio in the country, counting 66 SKUs;
• Financial benefits - Premium 5 has an annualized run-rate of around $20 million under asset light model.

Heritage issued 150 million shares of the company, the majority of which will be held in escrow by Heritage. Under the deal, Heritage should compensate further upon reaching several conditional milestones, such as agreed revenue goals, while keeping minimum gross margin objectives in the following 24 months.

Based on this, Premium 5 shareholders will have the option to get extra payment of up to CA$20.0 million in the form of shares.

Furthermore, once the purchase is finalized, Merida Capital Holdings, the biggest non-insider investor in Premium 5, will become Heritage shareholder. Merida Capital Holdings plans to help push for Heritage entrance in the U.S.

“This transaction delivers on several critical strategic objectives including immediate coast to coast sales and an impressive catalog of products for both the provincial boards and consumers across Canada,” Heritage CEO Clint Sharples stated. “We continue to build out our strong product development pipeline catering to multiple consumer categories and price points, and the addition of Premium 5 will expand our reach and accelerate the growth of our domestic and international platform.”