Columbia Care Announces September 1st Closing Date to Complete Acquisition of The Green Solution
Ryan Allway
August 27th, 2020
News
Columbia Care Inc. (NEO: CCHW) (CSE: CCHW) (OTCQX: CCHWF) (FSE: 3LP) (“Columbia Care” or the “Company,”) today announced that it will complete its acquisition of The Green Solution (“TGS”), the largest vertically integrated cannabis operator in Colorado on September 1, 2020. The combination is immediately accretive to Columbia Care’s Adj. EBITDA and, in combination with Columbia Care’s rapidly improving margin and profitability profile, will accelerate the Company’s transition to being Adj. EBITDA positive in 3Q 2020.
As one of the first publicly traded companies to acquire a Colorado cannabis business, the TGS acquisition establishes Columbia Care as the leader in the $1.75bn Colorado market, the second largest cannabis market in the world. With 23 dispensaries, many located in the Denver metro area and tourist destinations such as Aspen, TGS supplies its own dispensaries along with its wholesale distribution network from its six operational cultivation facilities and one highly-automated manufacturing facility. Additionally, a Columbia Care affiliate was recently awarded the opportunity to pursue a marijuana hospitality business license in Adams County, one of the first consumption lounges in the state.
With unaudited revenue through July 2020 of $52.7 million, a YoY increase of 29% compared to 2019, TGS has performed well YTD despite headwinds caused by COVID-19. As a core principal of its national strategy, Columbia Care expects to leverage TGS’s leadership position to serve as a consolidation platform for the fragmented Colorado market. Recently enhanced cultivation and manufacturing infrastructure will enable TGS to continue to expand margins while capturing incremental market share through M&A, the acceleration of its wholesale operations, implementation of additional manufacturing automation infrastructure, SKU optimization (including the launch of Columbia Care’s medical, health and wellness focused products), expanding outdoor cultivation (to solidify its position as the low cost producer of cannabis) and provide a unique customer journey by investing in and expanding dispensary operations.
“Closing the acquisition of The Green Solution represents a major milestone for Columbia Care,” said Nicholas Vita, CEO of Columbia Care. “This transaction aligned well with our national strategy to be the market leader in each of our key markets while adding a portfolio of brands and products to our suite of adult use offerings across the country. The acquisition of TGS is immediately accretive to Columbia Care’s Adj. EBITDA and accelerates our transition to generating positive Adj. EBITDA into 3Q. Overnight, we have established a leading position in the world’s second largest cannabis market. We added profitable scale to our national portfolio of brands and products and will continue to expand our market share in Colorado as we have done nationally – by offering consumers the highest quality products, best selection, most trusted customer experience, targeted brands and competitive wholesale offerings. We are grateful to our partners at TGS and applaud their vision and dedication to build one of the most successful companies in the industry. The entire Columbia Care team looks forward to working with the TGS organization and leadership as we pursue our joint goal of being the leading cannabis operator nationwide.”
“We met with most of the largest operators and are thrilled to have found a trusted partner in Columbia Care to see the vision we have always held for The Green Solution,” said Kyle Speidell, who co-founded and operates TGS with his brother, Eric Speidell. “This is a landmark acquisition that allows us to bring Columbia Care’s expansive product portfolio to our customers in Colorado, as well as enables us to quickly expand our brands, products and expertise to every major market in the US. We look forward to our continued success and growth, locally and nationally.”
The transaction increases Columbia Care’s footprint to 95 facilities open or under development, including 73 dispensaries and 22 cultivation and manufacturing locations, covering 18 jurisdictions in the United States and the European Union.
| (in $ ‘000)(*) |
Six Months Ended |
Full Year |
||||||
|
June 30, 2020 |
June 30, 2019 |
2019 |
||||||
| Combined Revenue(1) | ||||||||
| Columbia Care |
61,948 |
|
32,167 |
|
78,811 |
|
||
| TGS |
42,325 |
|
33,171 |
|
75,721 |
|
||
| Pro Forma |
104,273 |
|
65,338 |
|
154,532 |
|
||
| Combined Gross Profit Before Fair Value Adjustments(1) | ||||||||
| Columbia Care |
20,976 |
|
9,830 |
|
21,137 |
|
||
| TGS |
17,817 |
|
16,091 |
|
30,924 |
|
||
| Pro Forma |
38,793 |
|
25,921 |
|
52,061 |
|
||
| Combined Adjusted EBITDA(1) | ||||||||
| Columbia Care |
(14,599 |
) |
(22,048 |
) |
(48,295 |
) |
||
| TGS |
5,062 |
|
6,285 |
|
3,005 |
|
||
| Pro Forma |
(9,537 |
) |
(15,763 |
) |
(45,290 |
) |
||
(*) Columbia Care reported under IFRS, TGS reported under U.S. GAAP. All numbers are USD and unaudited.
(1) Combined metrics include operations from CannAscend in Ohio in Columbia Care and Pro Forma figures. Columbia Care purchased an exclusive option to acquire all outstanding membership interests in CannAscend following their twelfth month of operation and subject to regulatory approval.
For additional information regarding the transaction, please visit the presentations section of the investors’ website at www.ir.col-care.com.
Non-IFRS Financial Measures
In this press release, Columbia Care refers to certain non-IFRS financial measures, Combined Revenue, Adjusted or Adj. EBITDA, Combined Adjusted EBITDA and gross profit before fair value adjustments. These measures do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. Columbia Care considers certain non-IFRS measures to be meaningful indicators of the performance of its business. A reconciliation of such non-IFRS financial measures to their nearest comparable IFRS measure is included in this press release and a further discussion of some of these items is contained in the Company’s Management, Discussion and Analysis for the three and six months ended June 30, 2020 dated August 7, 2020.
About Columbia Care Inc.
Columbia Care is one of the largest and most experienced cultivators, manufacturers and providers of medical and adult use cannabis products and related services with licenses in 18 US jurisdictions(2) and the EU. Columbia Care has completed 2 million sales transactions since inception and working in collaboration with renowned and innovative teaching hospitals and medical centers globally, continues to be a patient-centered health and wellness company setting the standard for compassion, professionalism, quality, care and innovation in the rapidly expanding cannabis industry. For more information on Columbia Care, please visit www.col-care.com.
About The Green Solution
Since its inception in 2010 as one of the first cannabis companies in Colorado, The Green Solution (TGS) has grown exponentially into one of the top vertically integrated cannabis operators in Colorado. The family-founded and operated business is built on a foundation of customer service, education, innovation, product excellence, regulatory compliance and supply chain innovation. Awarded first place for its Supernova Cone and second place for its NectarBee Root Beer in The THC Classics 2020, TGS has remained an industry leader through proprietary technology and innovation, as well was through continually introducing new verticals, including a family of cannabis brands. Continued advancements across the marijuana supply chain and into enterprise technologies keep the company primed for growth. Today, TGS’ infrastructure is designed to accommodate dispensary operations at a global scale. Learn more about TGS at www.MyGreenSolution.com or download the (GREEN) Lifestyle App, a quick, convenient rewards and loyalty app developed exclusively by TGS. Follow TGS on Facebook, on Twitter and Instagram.
This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.
About Ryan Allway
Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.
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