Canadian cannabis product and brands company CannaRoyalty is continuing its expansion into California, announcing that it has entered an agreement to acquire 100 percent of Sonoma County’s FloraCal Farms for $1 million in cash and 3,508,772 CannaRoyalty shares on close of the deal, with an additional $3 million in cash and the same number of additional shares over three years.
FloraCal was founded three years ago, generating $6.4 million in fiscal year 2017, amounting to $3.2 million of earnings before interest, taxes, depreciation, and amortization. The flower products command $17 per gram. The deal, once finalized, will allow CannaRoyalty to license the strains worldwide.
“FloraCal is truly unique. The rare combination of product consistency, premium pricing, authentic brand, and resoundingly positive feedback from our dispensary partners and California consumers, positions it well to be a future global cannabis brand. We see its success in the discerning California market as evidence that branded flower that is truly differentiated occupies an important place in the cannabis industry.” – Marc Lustig, CannaRoyalty CEO in a press release
Drew Duval, FloraCal CEO, said the merger will allow the brand to develop to a size the company couldn’t achieve on their own.
This is the fourth California cannabis company acquired by the Canadian firm in the last calendar year. In 2017, CannaRoyalty acquired distributor Alta Supply and Kaya Management Inc., the exclusive manufacturer and license holder for Bhang brand vaporizer products. Just last month, the Ottawa-based firm acquired River Distribution which holds both medical and recreational distribution licenses in California.