Stem Holdings (CSE:STEM,OTCQB:STMH) is entering the Calfornia market after signing a definitive agreement for an all-stock acquisition of Alberta-based Seven Leaf Ventures (7VL) and its subsidiaries.
As quoted in the press release:
The acquisition is an arms length transaction. 7LV has entered into an asset purchase agreement to acquire a medical dispensary in the greater Sacramento, California area (the “Sacramento Dispensary”). Closing of the acquisition of the Sacramento Dispensary by 7LV is expected to occur in early 2020. 7LV also has an option to acquire a dispensary in Los Angeles, California.
The Sacramento Dispensary is expected to drive synergies with Stem’s premium branded dispensaries in Oklahoma City, OK, and in Eugene and Portland, OR. Stem also expects that the Sacramento Dispensary will receive its recreational license in the near term. The Sacramento Dispensary’s projected revenue for 2020 is US$7.5 million with EBITDA of US$2.0 million. In addition, 7LV is expected to have C$1.5 million in working capital at closing that will be available to Stem immediately.