Oakland, California-based Harborside Inc. has agreed to acquire UL Holdings — which owns and operates Urbn Leaf dispensaries, and LPF JV Corporation, or Loudpack, one of the state’s leading cannabis companies. Once the deals are finalized, Harborside will rebrand as StateHouse and Urbn Leaf CEO Ed Schmults will be named CEO.
“The cannabis industry in California has reached an important tipping point, and with the collective strengths of these three companies and the benefits of integration, we have the right combination of assets and skills to set a new standard, offering consumers the widest variety of products with best-in-class customer service.” — Schmults in a press release
For the first nine months of 2021, Harborside reported gross revenues of $57.8 million, on a proforma basis, while Urbn Leaf and Loudpack had revenues of $45.9 million and $61.4 million, respectively. Were the companies already combined, StateHouse would have revenues of $165 million over the first nine months of the year on a proforma basis.
Matthew Hawkins, current chairman and interim CEO of Harborside, will remain as chairman of the board of StateHouse. He said that, with the transactions, the companies “are working to create a west coast cannabis powerhouse.” He added that Schmults “is the right person to lead StateHouse into the future.”
“StateHouse will have a unique ability to navigate the operating challenges in the state and capitalize on the combined potential of the businesses we are acquiring,” Hawkins said in a statement. “We are building what we believe is the ideal platform to consolidate the California cannabis sector, positioning us for long-term growth in both market share and profitability.”
Once complete, StateHouse will have 15 retail locations; nine brands; manufacturing facilities with an annual capacity of more than $400 million; a state-wide distribution network for its branded products that reach more than 780 active accounts, including about 75% of California dispensaries; 230,000 square feet of greenhouse cultivation space; and 36,000 pounds of cultivation capacity with 22,000 pounds of additional near-term cultivation capacity.
Additionally, the management team has entered into a letter of intent with Pelorus Equity Group to complete the real estate financing of $77.3 million of non-dilutive real estate debt financing. The companies said the deal “unlocks significant value from the StateHouse real estate portfolio and provides significant growth capital for the business.”
The transactions are expected to close in the first half of 2022 and must still be approved by California regulators.
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