Tilray Announces Definitive Agreement to Acquire FOUR20 Adult-Use Cannabis Retailer
August 29 2019 - 08:00AM
Business Wire
FOUR20 owns and operates six stores in
Alberta and has secured 16 additional high-traffic store
locations
Agreement is for up to C$110M subject to the
achievement of performance milestones by FOUR20
Tilray, Inc. (“Tilray” or “the Company”) (NASDAQ:TLRY), a global
pioneer in cannabis research, cultivation, production and
distribution, today announced it has entered into a definitive
agreement (“the Agreement”) pursuant to which Tilray, through a
wholly-owned subsidiary of High Park Holdings Ltd. (“High Park”),
will acquire all of the issued and outstanding securities of 420
Investments Ltd. (“FOUR20”), an adult-use cannabis retail operator
headquartered in Calgary, Alberta.
FOUR20 provides adult-use cannabis consumers with a premium
retail experience focused on high quality product selection,
education and community. FOUR20 currently operates six licensed
retail locations and has 16 additional high-traffic locations
secured in desirable locations in Alberta, including Canmore,
Calgary and Edmonton. Tilray and High Park will leverage FOUR20’s
retail expertise and brand and market knowledge to expand into
other Canadian provincial markets where Licensed Producer retail
ownership will be permitted in the future.
“FOUR20 offers a premium retail experience for the mainstream
cannabis consumer and builds on our broader retail strategy, which
includes several minority investments in other leading cannabis
retailers,” says Tilray Chief Corporate Development Officer Andrew
Pucher. “With FOUR20, we will elevate the retail experience for
consumers by offering the best quality-tested products while
preparing for the next wave of legalized product launches taking
place by year’s end.”
Under the terms of the Agreement, Tilray will deliver up to
C$110M consisting of C$70M in Tilray Class 2 common stock (“Common
Stock”) at closing and $40M in Common Stock subject to the
achievement of certain performance milestones by FOUR20.
High Park and its affiliates have fulfilled adult-use supply
agreements and purchase orders across Canada since the federal
legalization of adult-use cannabis on October 17, 2018. High Park
will continue to offer consumers a broad-based portfolio of high
quality adult-use products as it grows its supply chain and expands
its production capacity in Canada. FOUR20 will operate as a
wholly-owned subsidiary of Tilray and will continue to offer
consumers a diverse selection of brands and products from craft and
mainstream producers including High Park.
The transaction is subject to regulatory approval(s). Completion
of the transaction will be subject to customary terms and
conditions, including approval by FOUR20 shareholders and court
approval of the arrangement. It is anticipated that the closing of
the transaction will be completed by the end of Q1 2020. Canaccord
Genuity Corp. provided a fairness opinion to Tilray’s board of
directors in connection with its approval of the transaction.
About Tilray® Tilray is a global pioneer in the research,
cultivation, production and distribution of cannabis and
cannabinoids currently serving tens of thousands of patients and
consumers in 13 countries spanning five continents.
About High Park™ Based in Toronto and led by a team with
deep experience in cannabis and global consumer brands, High Park
develops, produces, sells and distributes a broad-based portfolio
of adult-use cannabis brands and products.
About FOUR20™ FOUR20 is a cannabis retail brand with six
retail operations across Alberta, Canada. Led by retail and
cannabis industry experts, FOUR20‘s mission is to ignite community,
spark a new culture and elevate the standard of adult-use cannabis
retail across Canada. FOUR20 is a resource for municipalities,
citizens and organizations to ensure cannabis culture is promoted
in a socially responsible manner. 420 Premium Markets Ltd. and 420
Clinic Ltd. are subsidiaries of 420 Investments Ltd., which is
headquartered in Calgary, Alberta.
Cautionary note regarding forward-looking statements:
This press release contains “forward-looking statements” within the
meaning of the U.S. Private Securities Litigation Reform Act of
1995 and “forward-looking information” within the meaning of
Canadian securities laws, or collectively, forward-looking
statements. Forward-looking statements and forward-looking
information in this prelease include statements with regard to the
consummation of the purchase of FOUR20 by Tilray, the expansion of
FOUR20’s operations beyond its currently operating stores, the
achievement by FOUR20 of the performance milestones, High Park’s
growth and expansion, Tilray and High Park’s distribution of
adult-use cannabis products in Canada, the success of brands or
products in markets or the Company’s ability to supply retailers.
Forward-looking statements or forward-looking-information in this
press release may be identified by the use of words such as, “may”,
“would”, “could”, “will”, “likely”, “expect”, “anticipate”,
“believe, “intend”, “plan”, “forecast”, “project”, “estimate”,
“outlook” and other similar expressions. Forward-looking statements
are not a guarantee of future performance, future action or ability
to supply global markets and are based upon a number of estimates
and assumptions of management in light of management’s experience
and perception of trends, current conditions and expected
developments, as well as other factors that management believes to
be relevant and reasonable in the circumstances, including
assumptions in respect of the transaction between FOUR20 and
Tilray, FOUR20 and High Park’s future growth and operations, the
current and future regulatory environment, future approvals and
permits (including regulatory approval(s) and approval by FOUR20
shareholders and courts) and current and future market conditions.
Actual results, performance or achievement could differ materially
from that expressed in, or implied by, any forward-looking
statements in this press release, and, accordingly, you should not
place undue reliance on any such forward-looking statements and
they are not guarantees of future results. Please see the heading
“Risk Factors” in Tilray’s Quarterly Report on Form 10-Q, which was
filed with the Securities and Exchange Commission and Canadian
securities regulators on August 13, 2019, for a list of the
assumptions, uncertainties and other factors that may cause actual
future results or anticipated events to differ materially from
those expressed or implied in any forward-looking statements.
Tilray does not undertake and specifically declines any obligation
to update any forward-looking statements that are included herein,
except in accordance with applicable securities laws.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190829005105/en/
Media: Chrissy Roebuck, +1-833-206-8161, news@tilray.com
Investors: Katie Turner, +1-646-277-1228,
Katie.turner@icrinc.com
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