Letter of Intent Signed for Large Scale Merger Bringing Leading Brands with Distribution in More than 700 Retail Dispensaries in CA and OR
LOS ANGELES–(BUSINESS WIRE)–Vertical Companies™ (“Vertical”) today announced it has entered into an exclusive letter of intent (“LOI“) with the newly formed UMBRLA, Inc. (“UMBRLA”), a holding company in the process of consolidating several highly-specialized cannabis subsidiaries active in California, Oregon, Nevada, Arizona, and Oklahoma. The companies UMBRLA is consolidating generated over $32 million in cannabis revenue in 2018. Together, these two entities are expected to generate nearly $100 million in 2019 and $321 million in 2020 in cannabis revenue, making Vertical among the largest multi-state operators in the industry.
The combined companies will consist of state-of-the-art cultivation, a robust statewide distribution network in its key markets of Oregon and California, and a world-class portfolio of cannabis brands. Vertical aims to build the most dynamic and extensive portfolio of cannabis brands and products; mirroring major multinational alcohol, food and beverage, and other CPG companies. Through proprietary brands and partnership brands under several licenses, Vertical is building iconic premium lifestyle brands and products to target diversified customer niches in multiple form factors, including flower, oil, vapes, topicals, food and beverages, and medical applications.
The brand offerings of the combined entity are expected to include KOROVA, LTRMN, CABANA, STICKS, beaucoup, Trees By Game, Dab Daddy, Dr. D, Kaviar, Evolve, Evergreen Organix, EVE, Divios, InHayl, and Upside Edibles, with many more to come.
- More than 300 in-network retail dispensaries throughout the state.
- Large scale cultivation:
- Indoor – 60,000 sq. ft. in Needles as part of Vertical’s $17.5 million, 29-acre cannabis campus.
- Outdoor – 575 acres with next grow expected to be 50 acres in the Santa Rita Hills of Santa Barbara.
- Commercial kitchen (edibles) & “high-throughput” extraction facilities in Oakland and Needles.
- Distribution centers in the San Francisco Bay Area, Los Angeles, Orange County (license pending), and Needles.
- A well-established retail location in a key southern CA market, with another projected opening in 2019.
- Corporate headquarters in Agoura Hills, with sales & marketing offices in Oakland, Santa Ana, and Long Beach.
- More than 400 in-network retail dispensaries throughout the state.
- Manufacturing/distribution center in Portland, with a second distribution center in Eugene scheduled to open in 2019.
- Exclusive third party brand distribution partnerships with industry-leading brands.
- One of just 29 Cultivation licenses in the state—9,000 sq. ft., with the ability to triple in size.
In Nevada, Arizona & Oklahoma:
- Brand presence in more than 110 retail dispensaries through licensing agreements.
- Cultivation & Extraction operation in 52,000 sq. ft. in Kingman, AZ.
Smoke Wallin, newly named Vertical Chairman, stated: “This will be a transformative transaction for our combined businesses. UMBRLA is assembling a terrific group of brands with distribution in more than 700 stores. Combined with our back-of-house seed-to-sale infrastructure investments and large portfolios of unique brands, it makes for a powerful and scaling growth business. Perhaps most exciting to me is the strength and experience of our combined team.”
Subsequent to closing the transaction with UMBRLA, which is expected to occur by the end of July—subject to the satisfaction of closing conditions and regulatory approvals—Vertical intends to go public through a Reverse Take Over (“RTO”) of a Canadian Stock Exchange listed company. Timing of the RTO will be subject to regulatory, security exchange, and other such required approvals. Prior to the RTO, Vertical intends to undergo a capital raise into its MSO and Brand entities, the proceeds to be used to expand the combined operations, for working capital purposes and for limited payouts to certain UMBRLA shareholders for the acquisition.”
Wallin continued, “Cannabis is the most dynamic growth industry in our lifetime so there is a lot of room for early entrants to create value. However, just as in the beer, wine and spirits business, scale in distribution and strong brands combined with human talent will separate the true leaders from the rest of the market.”
Vertical is the leading vertically-integrated multi-state operator and brand and distribution company in the medical and adult-use cannabis industry. Vertical has operations in Arizona and California, combined with strategic partnerships in Ohio and additional markets that strategically position Vertical to take advantage of the legalization and normalization of cannabis globally. Vertical is led by an executive team of entrepreneurs and business leaders from the alcohol, agriculture, CPG, distribution, entertainment, food, healthcare, and medical industries.
About UMBRLA, Inc.
UMBRLA is a holding company in the process of consolidating several highly-specialized cannabis subsidiaries currently active in California, Oregon, Nevada, Arizona, and Oklahoma. All of these entities will work synergistically and collectively be led by an experienced leadership team with a proven track record in the cannabis industry. UMBRLA will own one of the top 10 cannabis brands in California, growing organically from its manufacturing & distribution center in Oakland.
Some of the statements in this press release are “forward-looking.” These forward-looking statements include statements relating to, among other things, the expected revenues of the combined company, and the terms, timing and success of Vertical’s acquisition and UMBRLA’s acquisitions. These statements involve risks and uncertainties that may cause results to differ materially from the statements set forth in this press release. Vertical’s results may also be affected by factors of which Vertical is not currently aware. The forward-looking statements in this press release speak only as of the date of this press release. Vertical expressly disclaims any obligation or undertaking to release publicly any updates or revisions to such statements to reflect any change in its expectations with regard thereto or any changes in the events, conditions or circumstances on which any such statement is based.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities.
Jon Lindsay Phillips, RLM Public Relations
(+1) 646-828-8566, [email protected]