SLANG Worldwide Shares Up After Announcing Merger With Vermont's Cannabis Co. High Fidelity

Cannabis consumer packaged goods company SLANG Worldwide Inc. SLNG SLGWF is on its way to a merger with Vermont's High Fidelity, Inc.

Transaction Details: Under the terms of the agreement, SLANG will pay $12 million by issuing some 31,578,947 of its restricted voting shares at 38 cents per share and $3 million in cash at the closing.

In addition, SLANG agreed to pay an additional $250 000 through the issuance of 657,894 of its shares at the set price and $2 million in cash in 18 months following the finalization of the merger.

SLANG also agreed to issue additional shares if certain performance milestones are met.

The Toronto-based company, which also has operations in Colorado and Oregon, expects to close the deal in the third quarter of 2021.

What It Means For Slang: The acquisition of Vermont's largest medical cannabis company boosts SLANG's operational footprint by adding a 28,000-square-foot cultivation, production, lab and distribution facility with a planned 50,000-square-foot expansion expected to be completed in 2022.

In addition, following the closing of the deal, SLANG will own two out of five medical cannabis licenses in Vermont - Champlain Valley Dispensary and Southern Vermont Wellness - which were rebranded as CeresMED earlier this month. The merger will also boost the company's retail footprint by adding four fully operational stores and the ability to add two new dispensaries once it obtains licenses.

High Fidelity, founded in 2012 in Burlington, services roughly 70% of the state's registered medical cannabis patients. It also owns Vermont's original CBD store - Ceres Natural Remedies.

"We recognized the value in High Fidelity as a local success story and pioneer in the Vermont cannabis community, focused on providing access to patients and consumers," Chris Driessen, CEO of SLANG, said Monday. "The High Fidelity team is proud of their accomplishments to date and are committed to the 'Vermont Way' of doing things, which means a focus on quality, collaboration, and the best consumer and employee experience."

Retail sales of recreational cannabis products in the Green Mountain State are poised to kick off in the fall of 2022.

The SLANG Worldwide's shares were trading 3.31% higher at $0.20 per share at the time of writing.

Photo by Esteban Lopez on Unsplash