Advances Driven By Stem’s footprint in the fast-growing concentrates segment through the acquisition of premier cannabis extraction company and award-winning brand
BOCA RATON, Fla., Sept. 20, 2021 (GLOBE NEWSWIRE) — Stem Holdings, Inc. d/b/a Driven by Stem (OTCQX: STMH) (CSE: STEM) (the “Company” or “Stem“), the first multi-state, vertically integrated Farm-to-Home™ (F2H) cultivation and technology omnichannel cannabis company featuring a proprietary Delivery-as-a-Service (DaaS) marketplace platform, today announced that it has acquired Artifact Extracts (“Artifact”), a premier cannabis extraction company based in Oregon known for its award-winning concentrates, as well as two dispensaries. The national market for concentrates grew 40% last year* as new and current cannabis consumers turn to this product category.
With the acquisition of Artifact, Driven By Stem will be well positioned to capture additional market share, expand its presence in the fast-growing concentrates segment, and maximize value for all its shareholders.
- Increases footprint of fully-owned dispensaries on the West Coast to six locations.
- Expand Oregon presence with a dispensary in Salem, to be re-named TJ’s on Broadway, and a dispensary in Eugene, to be re-named TJ’s on 7th, flanking its two existing dispensaries in the city. Cannabis sales in Salem/Marion County were $73.5 million in 2020 growing 32.4%** as compared to the prior year.
- Immediately launch the Budee™ proprietary delivery platform in Salem, extending its consumer reach with expedited service, with service expansion to Eugene in October.
- Supply consistent, high-quality biomass for Artifact from its cultivation operations for Stem’s TJ’s Gardens™ and Yerba Buena™ brands in Oregon, with accretive margins.
- Integrate Artifact’s premier line of concentrates including budder, badder, shatter, crumble, rosin, THC A crystals, and other popular forms into Stem’s family of brands and product lines.
- Expands the Company’s distribution footprint by cross-selling into dispensaries not yet supplied with the full portfolio of Stem’s brands, as well as including Artifact’s presence in all TJ’s dispensaries.
- Strengthen Stem’s experienced management team with the integration of Artifact’s skilled R&D leadership.
“Artifact is recognized for the potency and purity of its high-quality line of concentrates that have driven its growth in the Oregon market,” stated Adam Berk, CEO of Stem. “As a result of this strategic acquisition, we will benefit from the expertise and broad capabilities that the Artifact team will provide to our existing extraction team that has specialized in tinctures and edibles, as well as in retail operations. We look forward to integrating Artifact’s operations, dispensaries, and leadership into the Stem family, and quickly expanding product distribution to our full retail customer base for rapid growth.”
Jesse Johnson, the lead extractor at Artifact, commented, “We have worked with Stem in the past and trust the quality of the cannabis grown in its facilities. The synergies of this acquisition will build value for the company as we combine our expertise to launch cutting-edge products meeting the needs of this evolving market, as well as increasing their market penetration with an expanded retail and delivery platform,” he concluded.
The transaction closed September 17th, 2021 with all OLCC approvals granted. In connection with such transaction, Stem issued 8,209,178 shares of common stock of Stem at a deemed aggregate value of US$2,925,000 at a 24% premium to Stem’s closing share price of common stock. Such share consideration will be held in escrow for a period of six months with a subsequent six month leak out.
*MJ Business Daily, 2/8/2021, “Marijuana Concentrate Sales Up”
**Portland Business Journal, 1/11/2021, “Oregon Cannabis Consumption at Record High…”