Acquisition Substantially Increases Cultivation Capabilities; Provides Major Boost to Wholesale Supply of Distillate to Colorado CPG Manufacturers
DENVER, July 22, 2021 /PRNewswire/ – Schwazze, (OTCQX: SHWZ) (“Schwazze” or the “Company”), announced that it has closed the transaction to acquire the assets of Southern Colorado Growers (“SCG”) in Huerfano County, Colorado; previously announced June 1, 2021. The acquisition includes 34 acres of land with outdoor cultivation capacity, as well as indoor, greenhouse, and hoop house cultivation facilities and equipment. This purchase continues Schwazze’s expansion in Colorado and, is the company’s first major move into cultivation, which will provide high-end, premium cannabis directly to its Star Buds dispensaries and significant production of biomass for its PurpleBee’s extraction and manufacturing facility. PurpleBee’s is Colorado’s largest supplier of wholesale distillate for the CPG market, providing high quality distillate to leading vaporizer, concentrates and edibles companies.
The consideration for the acquisition is $6.8 million for the business and $4.5 million for the real estate and farm assets. Total consideration of $11.3 million was paid as $5.9 million of cash and $5.4 million in Schwazze common stock upon closing.
Schwazze has major expansion plans for SCG, which includes the buildout of cultivation capacity over the next four quarters. SCG produces premium flower with approximately 30 strains and has won multiple Connoisseur Cup awards for select strains in 2020 (Best Hybrid Flower – Banger & Mac) and 2021 (Best Rec Hybrid – The Mac).
“Our team is excited to add SCG, a premier cannabis cultivator, to our growing platform. This acquisition will provide premium quality flower to our 19 Star Buds Colorado locations. In addition, the SCG garden will significantly increase our capability to produce a substantial amount of biomass for our Purplebee’s distillate manufacturing operation, which will benefit the entire cannabis industry throughout the state. The addition of SCG to our portfolio is expected to provide a positive margin impact for Schwazze,” said Justin Dye, Schwazze’s CEO.