Golden Leaf (GLH.C) unlocks escrowed $35.0 million PP to fund transformative acquisition


Golden Leaf Holdings (GLH.C) significantly fattened its piggy bank when the company on the 12th that it had satisfied all outstanding conditions regarding the release of the escrowed funds from the company’s recently announced $35.0 million brokered private placement of subscription receipts, which successfully closed on June 2, 2017.

According to the news release, 125,892,857 subscription receipts issued in the offering were converted into 125,892,857 common shares and 62,946,428 common share purchase warrants of the company. Each warrant can be exercised for one common share at a rate of $0.37 per warrant share, until June 2, 2019. All securities issued in the offering are subject to a customary four-month hold period, expiring on October 3, 2017.

Part of the escrowed proceeds will power Golden Leaf’s Chalice Farms acquisition. Oregon-based Chalice is a vertically integrated cannabis operation that grows, extracts and sells flowers, oils and edibles to both medical patients and recreational users.

Chalice’s CEO and owner, William Simpson III, is a veteran of the medical marijuana sector. After witnessing the therapeutic effects of cannabis when his grandmother was diagnosed with terminal cancer, Simpson set up his own licensed laboratory-grade basement grow op in 2005 and began selling equipment to others to do the same.

Seven years later, when Bill 3460 was signed into law, Simpson received a license to open one of Portland’s first medical marijuana retail outlets, the Powell House Cannabis Club.

Simpson’s long-standing experience combined with Chalice’s popular products and award-winning stores, make the acquisition even more interesting in a state where the legalized cannabis market is expected to be worth half a billion dollars by 2020.

Golden Leaf has its hand on the wheel and plenty of cash to fuel its mandate which includes the company’s recent acquisition of NevWa’s cultivation and extraction license, based out of Sparks, Nevada.

When Nevada went recreational at the beginning of the month, millions of dollars were spent in a matter of days and shops were in danger of running out of product. This kind of intense fervor was most likely due to the historic nature of the event, but recreational run on dispensaries clearly indicated a strong and sustained market was in the offing.

Companies like Golden Leaf, who get in on the beginning of Nevada’s burgeoning marijuana sector have a good chance of securing a healthy market share as the Golden State’s legalized cannabis space grows to an estimated US$630.0 million by 2020.

Freeing up this money is a game changer for Golden Leaf and I look forward to the company’s news flow over the next 12 months. Do your homework and see if this one should be on your radar, it just might make a lucrative addition to your portfolio.


–Gaalen Engen


FULL DISLCOSURE: Golden Leaf Holdings is an EQUITY.GURU client.

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