• The new definitive agreement would allow Stem to foray into the lucrative California dispensary market."
   
• After successful completion of the transaction, Seven Leaf Ventures Chief Executive Officer, Arthur Kwan would be joining Stem Holdings board.

Stem Holdings, Inc., a leading Florida based hemp and cannabis company, has reportedly announced that it has inked a new definitive agreement to procure 100% of private Alberta-based corporation, Seven Leaf Ventures Corp., (7LV) along with its subsidiaries.

The proposed acquisition is being viewed as an arm’s length deal. The Alberta based company has signed a new asset purchase agreement of its own, where it would be acquiring a medical dispensary located in greater Sacramento, California.

The closing of the Sacramento Dispensary acquisition by Seven Leaf is anticipated to take place somewhere in early 2020. The company is also being given the choice to takeover another dispensary located in Los Angeles.

It is expected that the Sacramento Dispensary would drive synergies with the branded premium dispensaries od Stem working in Portland and Eugene, Oregon and Oklahoma City, Oklahoma.

The Florida based cannabis firm also is expecting to receive a recreational license for the Sacramento Dispensary in near term. The projected revenue for the Sacramento Dispensary in 2020 is estimated to be $7.5 million with an EBITDA of over $2.0 million.

Meanwhile, it is being estimated that Seven Leaf would have a working capital of more than C$1.5 million at closing. This working capital would be immediately made available to Stem upon the completion of the transaction.

Under the definitive purchase agreement, Stem Holdings would acquire all outstanding 7LV common shares through a three-cornered amalgamation. Once this transaction is completed, 7LV would become Stem’s wholly-owned subsidiary.

The company would be paying shareholders and average of 13,000,000 shares of Stem’s common stock as a consideration for Seven Leaf shares. 7LV has also given a nod to a contractual lock-up where Stem would be releasing 25% of its shares to 7LV in two business days after Sacramento Dispensary acquisition deal has been closed. The remaining 75% Stem shares would be released 90 days after the closing.

After successful completion of the transaction, Seven Leaf Ventures Chief Executive Officer, Arthur Kwan would be joining Stem Holdings board.

Source credit: https://ir.stemholdings.com/news-events/press-releases/detail/46/stem-holdings-enters-california-dispensary-market-following