Nutritional High International’s (EAT.C) sells Calyx Brands and NH Distribution California to privately-owned DB12 LLC, according to a press release.
Calyx distributes cannabis and cannabis derivatives, and holds a Type 11 distribution license from the California Bureau of Cannabis Control, which permits distribution in both the medical and adult-use markets, and also cannabis products from manufacturers to dispensaries.
“Through retaining minority ownership in DB12, Nutritional High will continue to have access to the California market for distribution of our own brands, potentially significant upside associated with ownership of the larger and more integrated DB12 operation, while continuing to improve our balance sheet,” said John Durfy, CEO of Nutritional High.
The company decided to sell Calyx as part of their new strategic review process. Selling Calyx off to a strategic partner will with access to funding and another source of flower product to add to its product offerings and therefore profitably expand the business.
The transaction involves the 100% sale of equity interest in Calyx, and in exchange Nutritional High will absorb $7 million in liabilities and gain a minority ownership position in DB12. The company also reserves the right to earn additional equity interest, conditional on revenue growth.
The transaction is subject to conditions, which are expected to be met within 30 days of closing. But there’s absolutely no assurance that the transaction will close during this time, or at all. But if it’s completed, the sale will result in the company no longer including Calyx in its financial statements.