TPCO Holding Corp, aka The Parent Company (OTCQX:GRAMF, NEO:GRAMU), said it signed definitive agreements to acquire 100% of the equity of Coastal Holding Company, LLC, a California retail dispensary and delivery operator.
The deal will see TPCO pay $16.2 million in cash with contingent consideration of up to $40 million in equity of The Parent Company upon completion of milestone events; as well as a $9 million option to acquire the remaining equity of a southern California dispensary that Coastal currently holds a minority interest in.
Based in Santa Barbara, Coastal was established in 2018 and serves as a retail dispensary license holder and operator with six retail licensed locations and two delivery depots.
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The California cannabis company’s operating dispensaries are located in Santa Barbara, Pasadena, West Los Angeles, Stockton and Vallejo. Additionally, Coastal is also engaged in construction for another retail license location in Northern California and operating delivery depots in Santa Barbara and San Luis Obispo.
Through their brick and mortar stores, online and delivery options Coastal serves more than 1,000 people everyday.
The acquisition of Coastal will grow TPCO California retail store and delivery depot footprints to 11 and six, respectively. The move also positions the company as the second largest operating retail dispensary and delivery hub in the State with an expanded reach to over 80% of California's population.
"I am thrilled to add Coastal to our expanding retail network, “Troy Datcher, chief executive officer of The Parent Company said in a statement.
Datcher continued: "With strategically positioned locations in high-traffic, densely populated regions, Coastal enables us to significantly increase our reach to a broader potential audience of consumers with both in-person retail and delivery options. In just over 4 months, we have more than tripled our operating retail stores in California."
With the addition of Coastal, TPCO continues to be the leading vertically integrated California cannabis company. The company's three manufacturing facilities guarantee unparalleled access to high-quality, low-cost cannabis, while its vast wholesale distribution network of more than 450 California dispensaries service more than 80% of the state.
"As we continue to extend our reach in California, our focus remains on providing our customers with the exceptional product selection and retail experiences they have come to expect from us. I look forward to welcoming and working with the Coastal team and introducing their customers to our convenient in-store, delivery, and mobile app shopping options and full suite of high-quality brands."
In addition to the Coastal transaction, The Parent Company also offered an update on its previously announced move to acquire Calma dispensary, located in West Hollywood. According to the company, the first tranche of 85% of the company closed on October 1, 2021. The transfer of the remaining 15% equity of Calma is expected to occur in 2022.
Contact the writer at georgia@proactiveinvestors.com
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