Harborside Inc. to Acquire Ownership in a San Francisco Dispensary in the Historic Haight-Ashbury District

Here’s the press release…

OAKLAND, Calif. and TORONTOOct. 19, 2020 /PRNewswire/ – Harborside Inc. (“Harborside”, or the “Company”) (CSE: HBOR), (OTCQX: HBORF), a California-focused, vertically-integrated cannabis enterprise, has reached a definitive agreement (the “Agreement”) to acquire 50.1% of the equity (the “Shares”) of FGW Haight, Inc. (“FGW”), a California corporation which has the conditional use approval necessary to operate a cannabis dispensary and related businesses in the Haight Ashbury area of San Francisco, California (the “Acquisition”).

The Acquisition further expands Harborside’s footprint in the state of California, solidifying a strong presence in the historical and culturally-significant Haight-Ashbury district of San Francisco.

“We’re thrilled to be bringing Harborside’s reputation for high-quality products and excellent retail experiences to the iconic Haight-Ashbury district,” said Peter Bilodeau, Chairman and Interim CEO of Harborside. “Upon completion of the acquisition, build-out and receipt of all necessary approvals, our latest retail location will seamlessly blend elevated, contemporary-industrial architecture with the best-in-class service and unbeatable product selection that Harborside has become famous for. We’re excited to continue engaging with our consumers and delivering strong value for our shareholders.”

Under the terms of the Agreement, Harborside will pay an aggregate purchase price of USD $2,179,350 (subject to purchase price adjustments) based on a post build-out and proforma working capital enterprise value of USD $4,350,000 (the “Purchase Price”). The Purchase Price will be comprised of: (a) USD $1,265,000 as consideration for convertible notes of FGW entitling the Company to such number of underlying Shares equal to 29.1% of the Shares; and (b) the balance of the Purchase Price in multiple voting shares (“MVS”) valued at CAD$125 per MVS as consideration to certain selling shareholders of FGW for 21% of the issued and outstanding Shares.

Harborside has also agreed to purchase an additional 29.9% of the issued and outstanding Shares (the “Subsequent Shares”) to get to an 80% ownership of FGW, subject to regulatory approvals. The aggregate purchase price for the Subsequent Shares will be USD $1,300,650, which will be satisfied in MVS valued at the greater of: (i) the 30 day VWAP of the subordinate voting shares of the Company on the Canadian Securities Exchange (“CSE”) at the time of issuance less a discount multiplied by 100; (ii) C$150 per MVS; or (iii) such other price as may be approved by the CSE .

Lastly, Harborside will also have a right of first refusal to purchase, in its discretion, in whole or in part and in one or more closings, the remaining 20% of the Shares (the “Remaining Shares”), subject to regulatory approvals.

The Acquisition is subject to certain material closing conditions, including approvals from regulatory authorities and the CSE. There can be no assurance that the transaction will be completed on the current terms or at all. Closing of the Acquisition is expected to occur on or before October 31, 2020.

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