General Cannabis To Purchase Trees For $39.5M; Changes Name, Strengthens Retail Footprint
General Cannabis Corp (OTCQB:CANN) is poised to acquire cannabis retailer Trees.
Transaction Details: The Colorado-based company agreed to purchase Trees for roughly $39.5 million, with 13% of the sum to be paid in cash over the next two years.
The remaining 87% of the purchase price will be paid in General Cannabis common stock.
The company opted to issue 38,745,193 shares to Trees shareholders at $0.89 per share.
In order to fund the acquisition, General Cannabis extended its convertible debt round by $2.3 million to $6.9 million.
Why It Matters: The acquisition expands General Cannabis' retail footprint by adding two stores in Colorado and three in Oregon.
Currently, Trees operates one Denver-based dispensary and two retail locations in Portland, with one more dispensary poised to open in each city in the months to come.
What's Next: Carl Williams, chairman of the board of General Cannabis, said Wednesday that the company anticipates that its revenue will "at least" triple once the transaction is closed.
"We expect to become cash-flow positive from operations as all stores open and ramp," he added.
Trees' senior leadership agreed to become a part of the General Cannabis team once the deal is closed, including founder and CEO of Tress, Tim Brown, who opted to join the company's board of directors.
General Cannabis will continue to operate under the Trees name while retaining its trading symbol CANN.
General Cannabis' shares were trading 0.75% lower at $8.11 per share a the time of writing.
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