Trees Corporation (NEO:TREE.AQN) said it has entered into an agreement with Calgary-based retail cannabis business 420 Investments to amalgamate through a reverse takeover of the company by 420 (FOUR20).
"We are very pleased to have navigated towards a partner in FOUR20 where together we will be well positioned to leverage our exceptional retail team, national presence and strong balance sheet towards the creation of significant shareholder value for both Trees and FOUR20 shareholders alike,” Trees CFO Jeff Holmgren said.
420 CEO Scott Morrow added: "The union of these two well-established brands will give the combined company geographic diversity and create a new springboard for growth. The cannabis retail industry is ready for consolidation and this new company will be in a great position to capitalize on these opportunities.”
Trees said that the amalgamated company will be named “420 Investments Ltd” or another such name as directed by 420 and, subject to approval, will be listed on Cboe Canada under a new trading symbol to be determined by 420.
It is expected that, upon closing, the board of directors will consist of eight directors, of which seven will be nominated by 420 and one will be nominated by Trees.
Trees said the current officers of the company are expected to resign and individuals chosen by 420 will be appointed in their place.
Current holders of shares, warrants, and/or options in Trees and 420 will be issued updated ones per the terms of the transaction.
Prior to closing, Trees shares will be consolidated so that Trees shareholders will hold 20.65% and 420 shareholders will hold 79.35% of the issued and outstanding Resulting Issuer shares once the transaction is completed.
420 is a Calgary, Alberta-based private company engaged in the business of retailing adult-use cannabis, with 40 operational retail locations across the provinces of Alberta and Ontario.
Trees Corporation (NEO:TREE.AQN) is a cannabis company at the intersection of community, content, and commerce. Listed on Cboe Canada, Trees offers a differentiated retail experience, that aims to educate, amplify and unlock emerging consumer segments and need-states that allow Trees to uniquely engage the 360-cannabis consumer.
Contact the author at emily.jarvie@proactiveinvestors.com
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