The deal positions GB Sciences as a truly vertically integrated company in the Las Vegas, Nevada, cannabis market:
- Cultivation license increases growing capacity
- Production license expands proprietary product line to edibles, oils and vapes
- Dispensary license creates higher profit margins allowing the company to sell finished products directly to the retail consumer
LAS VEGAS, March 28, 2018 /PRNewswire/ -- GB Sciences, Inc. (OTCQB: GBLX) is extremely pleased to announce it has signed a letter of intent to purchase 100% of the ownership interests of NevadaPURE's Las Vegas operation for $28 million in cash and the assumption of approximately $5 million of outstanding liabilities. The purchase is contingent on the completion of due diligence within approximately 30 days, negotiation of a final purchase agreement and regulatory approval.
The annualized sales run rate of NevadaPURE is over $16 million based on its performance since adult use became legal in Nevada, making the purchase price only two times sales. This sales multiple compares with GB's current price-to-annualized-sales multiple of 16, and a typical multiple of 60 or much more for publicly traded cannabis companies whose sales are similar to GB's.
This deal also provides GB with an additional three licenses from the state of Nevada, including a cultivation license, a production license and a dispensary license. This vertical integration will enable margins to increase significantly since a middleman between GB and its retail customers will no longer be necessary.
COO Kevin Kuethe said: "We have taken a major step toward capturing a lead position in the Nevada market. With our expertise in the science of cultivation, we plan on significantly improving the quality of the NevadaPURE facility's output, as well as dramatically increasing the sales revenue."
The deal enables GB to take over a very attractive lease of a 72,000 sq. ft. building, which is currently producing 350 pounds of dried cannabis monthly, with a growing capacity that can be expanded to allow 12,000 pounds per year. The building also contains ample space to accommodate partnerships that will increase royalty revenues.
CEO John Poss said: "We are really pleased and excited by this deal. Gaining 100% ownership of a dispensary, picking up $16 million in annual sales, providing additional capacity and space for new partnerships/brands – I can't think of anything wrong with that!"
About GB Sciences, Inc.
GB Sciences, Inc. (OTCQB: GBLX) is a diverse cannabis company, focused on standardized cultivation and production methods; as well as biopharmaceutical research and development. The Company's goal is creating safe, standardized, pharmaceutical-grade, cannabinoid therapies that target a variety of medical conditions. To learn more about GB Sciences, Inc., go to: http://gbsciences.com.
This press release may contain statements relating to future results or events, which are forward-looking statements. Words such as "expects", "intends", "plans", "may", "could", "should", "anticipates", "likely", "believes" and words of similar import may identify forward-looking statements. These statements are not historical facts, but instead represent only the Company's belief regarding future events, many of which, by their nature, are inherently uncertain and outside of the Company's control. It is possible that the Company's actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Further, information concerning the Company and its business, including factors that potentially could materially affect the Company's business and financial and other results, are contained in the Company's filings with the Securities and Exchange Commission, available at www.sec.gov. All forward-looking statements included in this press release are made only as of the date of this press release, and we do not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur or of which we hereafter become aware.
Note: Although the Company's research and development activities are not illegal, the production and sale of cannabis products violate federal laws as they presently exist.
Contact Information Corporate: GB Sciences, Inc., 3550 West Teco Ave., Las Vegas, NV 89118 866-721-0297, or Tom Arcuragi, EVP, [email protected]