Unrivaled Brands Inc (OTCQX:UNRV) said it has entered into binding letters of intent (LOI) with two Cookies branded retail stores in Redding and Oakland, California.
The vertically integrated cannabis company said the “strategic opportunity” provides it with the optionality to enter into a partnership with a globally recognized lifestyle brand, positioning the business for potential new growth opportunities without a current need for a substantial capital outlay.
"The culture-driven Cookies brand leads with the same philosophy and vision that fuels the evolution of Unrivaled,” Unrivaled CEO Sabas Carrillo said in a statement. “With this shared heritage, we are well positioned to expand our retail portfolio.”
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The company said Cookies Redding and Cookies Oakland are established stores with experienced operators who own or partially own other Cookies branded stores in addition to non-Cookies branded stores, cultivation, manufacturing, distribution, and brands.
It noted that Cookies is a lifestyle and the leading premiere cannabis brand. Founded in 2012 by Berner, the prolific Bay Area rapper and entrepreneur, and his partner Jai, Bay Area cultivator and breeder, the company built its identity by seamlessly combining new, top-tier genetics, the Internet, and music.
“We are excited for this new chapter at Unrivaled as we develop future growth opportunities while also being conscientious about our focus and allocation of capital and resources," added Carrillo.
Providing details of the transaction, Unrivaled said on December 30, 2022, it entered into binding letters of intent with each of Green Door Redding LLC and 510 Retail & Events Inc under which it is buying an option to purchase each of the dispensaries and will also negotiate and enter into management services agreements to operate the respective dispensaries.
The LOIs give Unrivaled the option to purchase each of Cookies Redding and Cookies Oakland on terms mutually agreeable to the parties for a period of 12 months, it added.
Unrivaled is paying the equivalent of $1 million and $500,000 in shares of its common stock to the respective vendors at the closing share price on December 30, 2022. If the purchases go ahead, the option to purchase deposits will be applied to the purchase price of each dispensary at the time of the transactions, it said.
Under the respective management services agreements, Unrivaled said it anticipates that Cookies Redding and Cookies Oakland will pay it a management fee equal to an amount of up to 25% of the net revenue of both dispensaries for its services.
Unrivaled Brands is a company focused on the cannabis sector with operations in California. The company operates four dispensaries and direct-to-consumer delivery, a cultivation facility, and several leading company-owned brands.
Unrivaled Brands is home to Korova, known for its high-potency products across multiple product categories, currently available in California, Oregon, Arizona, and Oklahoma.
Contact the author at stephen.gunnion@proactiveinvestors.com