Next Green Wave Acquires for $27 Million 100% of California-Based Consumer Products Goods & Extraction Leader, SD Cannabis
12 Mars 2019 - 7:11PM
InvestorsHub NewsWire
Next Green Wave Acquires for $27 Million 100% of
California-Based Consumer Products Goods & Extraction Leader,
SD Cannabis
Next Green Wave Immediately Enters
Major Global Brand & Product Distribution
Channels
Vancouver,
BC -- March 12, 2019 -- InvestorsHub NewsWire
-- Next Green Wave Holdings Inc. (CSE: NGW) (OTCQB: NXGWF) (“Next Green
Wave” or the
“Company”), is pleased to announce that it,
together with its US subsidiary Crossgate Capital US Holdings Corp.
have signed a definitive agreement (the
“Agreement”) dated March 11, 2019 to acquire 100%
of California-based SDC Ventures, LLC (“SDC”) (the
“Transaction”). SDC is a premium cannabis consumer
products goods, manufacturing and extraction leader, having 8
leading cannabis brands with 45 CBD and THC products that have a
combined global social influencer reach of over 25 million people
and with 100+ million YouTube views.
SDC (WEARESDC) is a team of brand building, cannabis consumer
product goods, manufacturing and extraction professionals, that
have decades of experience in cannabis in California. SDC has a
growing network of retail and online sales channels including 700
Zumiez stores which compliments Next Green Wave’s current
distribution opportunities.
“The SDC team shares
our vision and provides expertise that is synergistic to that of
Next Green Wave – to be the number 1 cannabis consumer products
goods company in California,” stated Leigh Hughes, CEO of Next
Green Wave. “Not only does this acquisition give us an array of
premium brands associated with key worldrenowned influencers to
penetrate global markets, it also gives us increased distribution
with revenues from sales, along with direct to consumer reach,
relationships and specialty extraction methods. Having the
opportunity to market through strategic brand partners to millions
of validated and loyal followers is a big deal when marketing
consumer products.”
BRANDS PARTNER LICENSES & PRODUCTS
ACQUIRED
SDC’s selection
of exclusive licensing relationships are defined by their
connection to a core loyal global audience, their reach across
digital/social platforms and their ability to partner on product
development and marketing. With the Brand Partners below, over 45
CBD and THC products have been acquired that cater to the entire
cannabis user market, including pets, in California and other parts
of the world;
- Carey
Hart (https://www.instagram.com/hartluck/)
- Husband to
multi Grammy winning artist Pink and as a former professional
freestyle motocross rider, Carey hart has been a fixture among
motocross competitions including Gravity Games, xGames, AMA Super
Moto Series and Tony Hawk's Boom Boom
Tour
- Loki
the Dog (https://instagram.com/loki)
- Kelly Lund and
Loko became inseparable in 2012, when he bought the husky/wolf mix
puppy home. ever since then they have been traveling the world and
sharing their story with millions of people through social and most
recently their newly released book, Wild Together.
Kelly has used his platform to bring awareness
to key animal issues and has also partnered with some of the
world’s largest brands including Toyota, Huckberry, REI and many
others.
- King Louie (https://www.instagram.com/
king
louie /)
-
King Louie is a Grammy nominated, up and coming
hip hop artist that was cited by Spin magazine for making Chicago
the biggest hip-hop scene in 2012. He regularly works in
collaboration and tours with artists like Kanye West and Chance the
Rapper. Currently in the recording studio, King Louie is expected
to release the biggest album of his career in 2019 with major
collaborations.
- Sketchy Tank (https://www.instagram.com/sketchy_tank/)
-
Internationally recognised artist who started his
illustrations as a blog that quickly took off in the underground
scene. Now his brands are widely recognized, and available at the
retailer Zumiez, now carrying the Lurking Class line of clothing
across their nearly 700 brick and mortar stores and
online.
- Junkyard LA (https://www.instagram.com/junkyardla
)
-
Junkyard is an illustrator and street artist who
was born and raised in South Africa now splitting his time between
Chicago and LA. Known for some of his larger than life black and
white murals and clothing he has teamed up with some of the biggest
brands in the game.
- Toy Machine Skateboard Co
(https://www.instagram.com/toymachine/)
-
Toy Machine has been building their reputation
and acquiring a loyal fan base for over twenty years. The company,
founded by Ed Templeton, is owned under distribution company Tum
Yeto. Toy Machine is widely known for its alien-like graphics
designed by Templeton. The company is a strong leader in the
skateboard industry, and they show no signs of slowing
down.
- SD Cannabis (http://instagram.com/weare.sdc)
(https://instagram.com/sdcannabis)
-
Two of SD Cannabis’ founders built a massive
following and fan base with their custom Harley shop San Diego
Customs. Known in the industry as one of the premier motorcycle
shops in the world, they regularly partner with Harley Davidson to
help give its production bikes the edge needed to make some noise
among hard core riders.
- OSS (https://www.instagram.com/onsomeshit/)
-
ONSOMESHIT or OSS as it is called, has grown into
a mega brand of its own over the last few years. It started in a
small BMX stop on Melrose Ave, LA next to the famed BAIT store. In
that shop the team started to interview BMX pros and music
celebrities when in town on their podcast called @NOJumper, that
quickly grew in following to well over 1 Million followers on
Instagram.
- Thorn St. Beer (https://www.instagram.com/thornbeer/)
-
Thorn Brewing was born out of the craft
beer movement that has taken
the US by storm. Started in the craft beer
capital of America, San Diego, their growth has continued with
distribution throughout California and plans for national
distribution in 2019. Their new state-of-the-art brewery has become
a must see stop for beer fanatics that come to San Diego to
experience some of the world's best beer. They were also the first
brewery to make a terpene infused
beverage.
"We are
excited to join forces with Next Green Wave, which is arguably one
of the leading cannabis innovators in California,” said Ryan Lange,
SDC co-founder. “This transaction will allow the SDC team to
capitalize on its decades of cannabis expertise in California and
to rapidly expand our brands, distribution channels and
manufacturing expertise across the state and into international
markets. Next Green Wave brings world-class leadership and coupled
with our common values as innovators, we believe by joining forces
we can accelerate our proposition to become a serious cannabis
consumer product goods company.”
ACCELERATING MANUFACTURING
THROUGH ACQUISITION
SDC brings years of experience in cannabis
manufacturing and extraction processes that give an edge and
creative ability to experiment with new methods in production of
finished products. As part of this transaction, the SDC team will
immediately become the Head of our Extraction and Manufacturing
unit within our 3,240 sq. ft facility. Speciality extraction and
manufacturing methods include ice water hash – the washing of the
cannabis plant from whole plant fresh frozen material, rosin
pressed from ice water hash and cannabis only terpenes that have a
special process to end with a final result that has never been
winterized. These artisanal methods will have an immediate impact
on new products that Next Green Wave will now bring to market
within the next three months.
As part of this transaction, SDC
brings over 30 different types of extraction-based products across
its 8 brand partners including everything from vape cartridges,
rosins, ice water hash, tinctures, dog products, consumables as
well as a number of CBD wellness and recovery products.
TRANSACTION DETAILS
The purchase will be completed through the
Company’s wholly-owned subsidiary Crossgate Capital US Holdings
Corp. The total value of this transaction is $20.6 million in
cash, shares and performance shares to be earned over the next
three years and will be payable as follows (all cash amounts in US
currency):
a) $600,000 on closing of the Transaction, to be
satisfied by either, at the sole discretion of the SDC
Securityholders, (i) cash to be fully paid within the sixty (60)
days of CSE approval of the Transaction; or (ii) Next Green Wave
Shares each at a deemed price of the volume weighted average price
of the Company’s shares as traded on the Canadian Securities
Exchange for the 20 day period (the “20 Day VWAP”)
prior to the Closing Date; and
b) $4,000,000 on completion of the transfer of all rights and
titles of the assets of SDC, to be satisfied by the issuance of
Next Green Wave Shares each at a deemed price of the 20 Day VWAP
prior to the date of completion.
In addition, to the above, if certain
performance metrics are met, additional consideration will be paid
as follows;
c) $750,000 on execution of the reassignment of each of the eight
(8) definitive partnership agreements to a maximum of $6,000,000 to
be satisfied by the issuance of Next Green Wave Shares each at a
deemed price of the 20 Day VWAP on the date of execution of each
such partnership agreement;
d) $5,000,000 at the end of the period beginning one-hundred and
twenty (120) days after Closing (“Year 1”) on
achieving net sales targets, to be satisfied by the issuance of
Next Green Wave Shares each at a deemed price of $1 per Next Green
Wave Share; and
e) $5,000,000 at the end of the twelve (12) month period
immediately following Year 1 on achieving year 2 net sales targets,
to be satisfied by the issuance of Next Green Wave Shares each at a
deemed price of $1 per Next Green Wave
Share.
Each of the above
performance metrics allow for a pro-rata amount to be paid for
partial completion of the metric. In the case of the
performance metrics relating to net sales, in order for the
10,000,000 shares to be issued under (d) and (e) above SDC will be
required to achieve $50,000,000 in net sales.
Each of the SDC Securityholders have entered into an Escrow
Agreement such that the Next Green Wave Shares issued will continue
to be held in voluntary escrow and released over a 36-month period
and pursuant to the terms of those escrow agreements. This
transaction is an arm’s length transaction.
The Company has agreed to pay finders’ fees to certain finders
equal to approximately 3.6% of the value of the transaction to be
paid according to the schedule of closings set out above.
The above transaction and finders’ fees are subject to the
acceptance of the Canadian Securities
Exchange.
APPOINTMENT OF
HYBRID FINANCIAL FOR INVESTOR RELATIONS SERVICES
The Company has also appointed Hybrid Financial Services of
Toronto, Ontario as investor relations consultants, to provide
comprehensive investor relations services coverage across both
Canada and U.S market. The Company will issue $150,000 worth of
shares at a price of $0.67 CAD as compensation for a sixmonth
marketing agreement. The shares are subject to a four-month
hold period.
ABOUT NEXT GREEN WAVE
Next Green Wave (NGW) is a vertically integrated
seed-to-consumer premium medicinal and recreational cannabis
company operating in California - the world’s largest cannabis
market. NGW has acquired licenses for its nursery/breeding,
cultivation, extraction, and distribution operations covering both
medical and recreational cannabis production and services.
Construction of phase one of the indoor facility (35,000 ft²)
has been completed and is now moving into production of premium
cannabis products. NGW will push the innovation envelope and will
develop premium brands that can be distributed across the globe.
NGW has a library of more than 120 genetic cannabis strains which
include several cannabis cup award winning genetics. The
company has acquired over 15 acres of cannabis-zoned development
land in Coalinga, California, providing future growth. To
find out more visit us at www.nextgreenwave.com or follow
us on Twitter at @nextgreenwave, on Instagram, and LinkedIn.
ABOUT SD CANNABIS
SD Cannabis (SDC) specializes in developing extraction and
manufacturing methods that focus on maintaining the quality and
natural benefits of cannabis. Through its use of the most
sophisticated equipment available, the team takes a scientific
approach to capturing all of the active available cannabinoids in
the plant and then integrates those ingredients into products
without adding other artificial or dangerous fillers. In addition,
SDC’s leadership team brings decades of experience in developing,
launching and marketing brands across the landscape of culture,
art, music, action sports, and fashion with a core understanding of
how to leverage the power of today’s influencers to drive consumer
demand and product innovation. To find out more, visit us at
www.wearesdc.com and on Instagram.
On behalf of the Board,
Leigh Hughes
CEO and Executive Chairman, Next Green Wave Holdings
Inc.
For more details on this release please click on the
following video interview:
https://youtu.be/MemRxjNnpEU
Next Green Wave
Forward Looking Statements
This press release contains
forward-looking statements within the meaning of applicable
securities laws. All statements that are not historical facts,
including without limitation, statements regarding future
estimates, plans, programs, forecasts, projections, objectives,
assumptions, expectations or beliefs of future performance, are
“forward-looking statements.” Forward-looking statements can be
identified by the use of words such as “plans”, “expects” or “does
not expect”, “is expected”, “estimates”, “intends”, “anticipates”
or “does not anticipate”, or “believes”, or variations of such
words and phrases or statements that certain actions, events or
results “may”, “could”, “would”, “might” or “will” be taken, occur
or be achieved. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause
actual results, events or developments to be materially different
from any future results, events or developments expressed or
implied by such forward looking statements. Such risks and
uncertainties include, among others, the risk factors included in
the preliminary prospectus, including without limitation dependence
on obtaining and maintaining regulatory approvals, including
acquiring and renewing state, local or other licenses and any
inability to obtain all necessary governmental approvals licenses
and permits to complete construction of its proposed facilities in
a timely manner; engaging in activities which currently are illegal
under US federal law and the uncertainty of existing protection
from U.S. federal or other prosecution; regulatory or political
change such as changes in applicable laws and regulations,
including U.S. state-law legalization, particularly in California,
due to inconsistent public opinion, perception of the medical-use
and adult-use marijuana industry, bureaucratic delays or
inefficiencies or any other reasons; any other factors or
developments which may hinder market growth; NGW’s limited
operating history and lack of historical profits; reliance on
management; NGW’s requirements for additional financing, and the
effect of capital market conditions and other factors on capital
availability; competition, including from more established or
better financed competitors; and the need to secure and maintain
corporate alliances and partnerships, including with customers and
suppliers. Readers are encouraged to the review the section titled
“Risk Factors” in NGW’s preliminary prospectus. These factors
should be considered carefully, and readers are cautioned not to
place undue reliance on such forward-looking statements. Although
NGW has attempted to identify important risk factors that could
cause actual actions, events or results to differ materially from
those described in forward-looking statements, there may be other
risk factors that cause actions, events or results to differ from
those anticipated, estimated or intended.
There can be no assurance that forward-looking statements will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in forward-looking
statements. NGW no obligation to update any forward-looking
statement, even if new information becomes available as a result of
future events, new information or for any other reason except as
required by law.
For more information regarding Next Green Wave,
contact:
Caroline Klukowski
VP Corp. Development Tel: +1 (778) 589-2848
IR@nextgreenwave.com
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