TPCO Holding Corp. GRAM GRAMF, which is doing business as The Parent Company, is acquiring Coastal Holding Company, LLC, a California retail dispensary and delivery operator.
Based in San Jose, the company said Monday that it is purchasing 100% of the equity of Coastal for $16.2 million in cash with contingent consideration of up to $40 million in equity of The Parent Company upon completion of milestone events and a $9 million option to acquire the remaining equity of a southern California dispensary that Coastal currently holds a minority interest in.
The transaction, which is pending regulatory approvals, including approval of the NEO Exchange, is expected to close in 2022.
What It Means For The Parent Company
The acquisition will boost the company's current California retail store and delivery depot footprints to eleven and six, respectively.
Coastal is the second-largest operating retail dispensary and delivery hub in the Golden State, with an expanded reach to over 80% of its population. Currently, it operates five of six retail licensed locations in Santa Barbara, Pasadena, West Los Angeles, Stockton and Vallejo as well as two delivery depots in Santa Barbara and San Luis Obispo.
"With strategically positioned locations in high-traffic, densely populated regions, Coastal enables us to significantly increase our reach to a broader potential audience of consumers with both in-person retail and delivery options," Troy Datcher, CEO of The Parent Company explained. "In just over four months, we have more than tripled our operating retail stores in California."
Datcher said that the company is poised to bolster its reach in California and introduce Coastal's customers to The Parent Company's convenient in-store, delivery and mobile app shopping options and its full suite of high-quality brands.
"As we continue to extend our reach in California, our focus remains on providing our customers with the exceptional product selection and retail experiences they have come to expect from us," Datcher added.
West Hollywood Dispensary Acquisition Update
The Parent Company simultaneously revealed that it has wrapped up the first tranche of the previously announced acquisition of Calma dispensary, located in West Hollywood, with the acquisition of 85% of Calma's equity securities.
In June, the company said it plans to compensate the acquisition with $11.5 million, consisting of $8.5 million in cash and $3 million in its equity. The acquisition of the remainder of Calma's 15% equity is expected to occur in 2022.
The Parent Company traded 0.31% higher at $3.2 per share after the market close on Monday.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Meet the biggest cannabis industry players and make deals that will push the industry forward.
Featuring live company presentations, insider panels, and unmatched access to networking, the Benzinga Cannabis Capital Conference is where cannabis executives and entrepreneurs meet.
Join us April 11-12, 2023 at Fontainebleau Miami Beach in sunny Florida.