ACQUIRES KING EXTRACTS AND GAINS ACCESS TO THE CALIFORNIA CANNABIS MARKET
Wildflower Marijuana Inc. (SUN.C) has signed a letter of intent to acquire the King Extract brand, its trademarks and all proprietary formulations. Currently, King is in over 50 retail outlets but is poised for growth having recently signed on with one of the largest distributors in California giving Wildflower access to over 600 retail cannabis stores. King has also secured a steady supply of quality, pesticide-free oil that can meet the demand of both the King and Wildflower products.
With a population of over 39 million, California has the sixth-largest economy in the world and is the largest cannabis market. With the passing of Proposition 64, California approved the legalization of recreational cannabis this past November. Wildflower's expansion into California comes at an ideal time for the company to gain brand awareness and market share prior to full legalization.
As part of the LOI, King managing partner Eric Bava will step in and run all California operations for Wildflower. In consideration, King will receive 500,000 common shares of Wildflower. Wildflower will also issue an additional 500,000 common shares within the first year when sales reach $180,000 (U.S.) in any given month and a further 500,000 common shares if sales increases at a minimum of 15 per cent per month in the aggregate over the following six months. In addition, Wildflower will pay an amount equal to 50 per cent of the net profits from the King business until the earlier of: (i) two years from signing a definitive agreement; and (ii) Wildflower shares trading at price of $1.25 or greater for 10 consecutive trading days. Any shares issued will be subject to a one-year hold period from the date of issue provided King is still receiving its net profits, otherwise there will be a four-month hold period from the date of issue. In addition, the company has granted 250,000 stock options at a price of 64 cents per share for a period of five years. This agreement is subject to satisfactory due diligence and the completion of formal definitive agreements.
Wildflower chief executive officer William MacLean stated: "We have built the model in Washington and it's now time to start replicating it in other markets. With recreational legalization of cannabis approved in California our timing couldn't be better. To be a major influencer in this industry, having a presence in the largest cannabis market is a must. Our acquisition of King not only gives us this access but it also gives us a strong brand that caters to a different demographic than Wildflower. With King's focus on THC and Wildflower's focus on CBD we will be positioned for great growth in cannabis, holistic wellness and retail consumer goods markets."
About Wildflower Marijuana Inc.
Wildflower is a cannabis company focused on developing and designing branded cannabis products.