TORONTO--(BUSINESS WIRE)--Halo Labs Inc. (“Halo” or the “Company”) (NEO: HALO, OTCQX: AGEEF, Germany: A9KN) is pleased to announce it has exercised Mendo Distribution and Transportation’s (“MDT”) option to purchase award winning Outer Galactic Chocolates LLC (“OGC”), holder of a Type N manufacturing license. MDT was recently acquired by the Company through merger on January 9, 2020.
Transaction Highlights
- Halo will obtain a Type N California license allowing for the production of infused and edible products
- Halo plans to launch its Hush® edible products (gummies and syrups) in THC and 1:1 THC/CBD formulations, as well as support the expanded production and distribution of the award winning OGC-branded chocolate edibles in California
- Halo plans to retain OGC founder as subject matter expert and consultant on edibles and gourmet chocolate production
- Halo will own full interest in OGC, and plans to place the business under its California holding company, PSG Coastal Holdings LLC
Pursuant to the press release dated January 9, 2020, Halo acquired MDT and now has elected to exercise the Company’s option, through MDT, to acquire OGC in exchange for $500,000 of Halo’s common stock (“Halo Common Shares”). The acquisition will give Halo a license to produce infused and edible cannabis products adjacent to the MDT facility in Ukiah, California. A Type N license permits manufacturers to conduct most activities including packaging and labeling, however does not allow for extraction. For extraction in California, Halo utilizes its Type 7 licensed facility in Cathedral City, California.
In addition to obtaining the Type N license in California, Halo plans to execute a management agreement with the current management of OGC to aid in the transition and buildout of the business, which will include the introduction of both Halo-branded and other white label infused products. A strategic partnership with existing management will provide a strong base for the development of new edible cannabis products in California under the Hush® brand through channels and clientele already established by OGC.
Indeed ingestible products, in particular “gummies”, are a high value product category in the California market place. According to a July 2019 BDS Analytics report(1), gummies are the top selling ingestible product occupying numbers 1 through 17 on the list of the 20 top selling edible SKUs in California. CBD gummy formulations are also gaining traction.
Kiran Sidhu, Halo CEO and Co-Founder, comments, “Obtaining a Type N manufacturing license in California for the production of infused and edible products is a step in diversifying Halo’s product offering in this growth category. Not only are we building new lines around award winning expertise in OGC, we will support expanded distribution of OGC-branded chocolates to Southern California. We look forward to expanding our product offering in California, one of the world’s largest cannabis markets and bringing high-end and value-driven edibles to consumers.”
In supporting the growth of OGC-branded chocolates, Halo can distribute this award-winning line of gourmet, artisanal chocolates. OGC’s award winning chef and chocolatier makes small batch edibles utilizing ingredients from local farmers with sustainable growing practices. They have been awarded “Best Dark Chocolate Hybrid” and “Best Chocolate Truffle” by Edible Magazine and took home the prize for “Best Chocolate” at the Emerald Cup in 2017. OGC cannabis infused edibles are available in milk chocolate, sugar free, and dark chocolate throughout dispensaries in Northern California.
Mr. Sidhu continues, “As with our DNA Genetics partnership, this transaction with OGC and its management allows us to add value to the Halo product portfolio, by providing high quality and award winning products. ”
Transaction Details
Pursuant to the terms of the transaction, the sole owner of all membership interests of OGC is expected to be issued 1,982,979 shares ($500,000) of Halo Common Shares that will be priced at $0.252 (C$0.329) based on the 30-day VWAP. 25% of the consideration will be due upon closing the transaction including execution of a definitive agreement and receipt of regulatory approval, with the remainder be released in equal monthly installments over the 12-month period following closing.
Completion of the transaction is subject to, among other things, the satisfaction or waiver of any conditions precedent to the consummation of the transaction (including the receipt of any requisite regulatory and stock exchange approvals).
About Halo
Halo is a global cannabis extraction company that develops and manufactures quality cannabis oils and concentrates, which are the fastest growing segments in the cannabis industry. Halo is a global leader in cannabis oil and concentrates, having produced over 4.5 million grams of oils and concentrates since inception. The Company has expertise across all major cannabis manufacturing processes, leveraging a variety of proprietary processes and products. The forward-thinking company is led by a strong management team with deep industry knowledge and blue-chip experience. The Company is currently operating in California and Oregon, as well as in Nevada with our partner Just Quality, LLC, and in Lesotho with the 205-hectare Bophelo cultivation zone. With a consumer-centric focus, Halo will continue to market innovative, branded, and private label products across multiple product categories.
For further information regarding Halo, see Halo’s disclosure documents on SEDAR at www.sedar.com.
For further information regarding Outer Galactic Chocolates, see OGC’s website at www.outergalacticchocolates.com.
(1) The BDS Analytics Report can be found at - https://bdsanalytics.com/gummies-are-as-popular-as-ever/
Cautionary Note Regarding Forward-Looking Information and Statements
This press release contains certain "forward-looking information" within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only Halo’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of Halo’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or may contain statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "will continue", "will occur" or "will be achieved". The forward-looking information and forward-looking statements contained herein may include, but is not limited to, statements regarding the Company’s acquisition of OGC and its Type N License in California.
By identifying such information and statements in this manner, Halo is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from those expressed or implied by such information and statements. In addition, in connection with the forward-looking information and forward-looking statements contained in this press release, Halo has made certain assumptions. Although Halo believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and Halo does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to Halo or persons acting on its behalf is expressly qualified in its entirety by this notice.
