Delota Corp said it has entered into an agreement with the shareholders of 2766563 Ontario Inc to acquire all of the issued and outstanding shares of 267 Ontario, led by Plant-Based Investment Corp, which currently holds approximately $11.13 million in debt of 2360149 Ontario Inc, doing business as 180 Smoke.
Delota acquired 180 Smoke, a leading omni-channel Canadian specialty vape retailer that has a strong recognizable brand among Canadian adult vape consumers with over 230,000 registered customers across its B2C channel, on March 30, 2021.
Under the agreement with 276 Ontario, Delota has agreed to purchase the shares for an aggregate purchase price of $3,000,000.25, which the company will satisfy through the issuance of an aggregate of 12,000,001 common shares at a deemed price of $0.25 per common share.
"I am pleased we could finalize the terms of the Acquisition with the shareholders of 276 Ontario which will effectively eliminate the Debt from the Company's balance sheet upon closing and should provide a significant bump to Delota's market capitalization," said Cameron Wickham, executive vice-chairman and CEO of Delota in a statement.
READ: Delota opens first Offside Cannabis dispensary
"With a clean balance sheet and a strengthened public currency, Delota would be in a much stronger position to raise capital and entertain accretive M&A opportunities to expand its retail footprint and execute on our business plan.
"Our immediate focus continues to be on organic growth opportunities within our existing lease portfolio and net-new leases to introduce additional Offside Cannabis dispensaries to serve the value-conscious cannabis consumer and our forthcoming dispensary brand that will be positioned to provide a more experiential experience," he added.
Delota said the parties will proceed to close the acquisition upon satisfaction of the closing conditions, which includes the approval of the TSX Venture Exchange.
Delota is an established cannabis and vape retailer that owns and operates a portfolio of Canadian retail brands well-positioned to capitalize on the evolving cannabis and nicotine retail sectors.
The company's goal is to build the most popular retail cannabis and nicotine brands in Canada by aggressively growing its retail footprint and developing retail banners that resonate with a loyal and growing cannabis and nicotine customer base. Its current retail banners include Offside Cannabis, SPDR Cannabis and 180 Smoke.
Contact the author at jon.hopkins@proactiveinvestors.com