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TORONTO, Jan. 15, 2020 (GLOBE NEWSWIRE) -- Halo Labs Inc. ("Halo" or the "Company") ((NEO: HALO, OTCQX:AGEEF, Germany: A9KN)) is pleased to announce it has exercised Mendo Distribution and Transportation's ("MDT") option to purchase award winning Outer Galactic Chocolates LLC ("OGC"), holder of a Type N manufacturing license. MDT was recently acquired by the Company through merger on January 9, 2020.
Transaction Highlights
- Halo will obtain a Type N California license allowing for the production of infused and edible products
- Halo plans to launch its Hush® edible products (gummies and syrups) in THC and 1:1 THC/CBD formulations, as well as support the expanded production and distribution of the award winning OGC-branded chocolate edibles in California
- Halo plans to retain OGC founder as subject matter expert and consultant on edibles and gourmet chocolate production
- Halo will own full interest in OGC, and plans to place the business under its California holding company, PSG Coastal Holdings LLC
Pursuant to the press release dated January 9, 2020, Halo acquired MDT and now has elected to exercise the Company's option, through MDT, to acquire OGC in exchange for $500,000 of Halo's common stock ("Halo Common Shares"). The acquisition will give Halo a license to produce infused and edible cannabis products adjacent to the MDT facility in Ukiah, California. A Type N license permits manufacturers to conduct most activities including packaging and labeling, however does not allow for extraction. For extraction in California, Halo utilizes its Type 7 licensed facility in Cathedral City, California.
In addition to obtaining the Type N license in California, Halo plans to execute a management agreement with the current management of OGC to aid in the transition and buildout of the business, which will include the introduction of both Halo-branded and other white label infused products. A strategic partnership with existing management will provide a strong base for the development of new edible cannabis products in California under the Hush® brand through channels and clientele already established by OGC.
Indeed ingestible products, in particular "gummies", are a high value product category in the California market place. According to a July 2019 BDS Analytics report(1), gummies are the top selling ingestible product occupying numbers 1 through 17 on the list of the 20 top selling edible SKUs in California. CBD gummy formulations are also gaining traction.
Kiran Sidhu, Halo CEO and Co-Founder, comments, "Obtaining a Type N manufacturing license in California for the production of infused and edible products is a step in diversifying Halo's product offering in this growth category. Not only are we building new lines around award winning expertise in OGC, we will support expanded distribution of OGC-branded chocolates to Southern California. We look forward to expanding our product offering in California, one of the world's largest cannabis markets and bringing high-end and value-driven edibles to consumers."
Mr. Sidhu continues, "As with our DNA Genetics partnership, this transaction with OGC and its management allows us to add value to the Halo product portfolio, by providing high quality and award winning products. "
Transaction Details
Completion of the transaction is subject to, among other things, the satisfaction or waiver of any conditions precedent to the consummation of the transaction (including the receipt of any requisite regulatory and stock exchange approvals).
For further information regarding Halo, see Halo's disclosure documents on SEDAR at www.sedar.com.
CONTACT INFORMATION
Halo Labs
Investor Relations
[email protected]
For further information regarding Outer Galactic Chocolates, see OGC's website at www.outergalacticchocolates.com.
(1) The BDS Analytics Report can be found at - https://bdsanalytics.com/gummies-are-as-popular-as-ever/
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