Fiore Cannabis (FIOR.C) is going ahead with their plans to become a five-market Canadian multistate operator with the acquisition of Unified Group, a spinout of Unified Global.
The transaction will be through a triangular merger wherein the spinco will become part of Unified Fiore, a Colorado subsidiary of Fiore.
“I’m excited for Fiore to acquire the Cannabis Assets and to bring on Paul Lufkin who will lead Unified’s talented team with over 100 combined years of cannabis experience,” said Erik Anderson, Fiore’s President and CEO. “The Transaction will enable us to accelerate our growth plans and add additional attractive markets to our operations. Consolidating Fiore’s operations with the acquisition of Unified’s Cannabis Assets is the best move for our company and for our investors as we immediately gain expansion capabilities. We will have the opportunity to maximize our unique position in a crowded cannabis space.”
Coming along with the acquisition, Fiore will directly benefit from a US$1.5 million financing of a convertible debenture they arranged with help from Unified. The debenture comes at 12% interest per year with an 18 month term, and is secured by 1% of Fiore’s revenues. The debenture will convert at the conversation price of US$0.10 per year.
Fiore anticipates using a portion of the proceeds from the financing to pay for their cannabis assets, and use the remainder for working capital and other general corporate purposes. These cannabis assets include certain letters of intent, brands, intellectual property, and leadership talent held by the spinco, which will give Fiore multistate operator status and access to up to 41 retail cannabis locations and three cultivation operations in Colorado, Oregon and Alberta. It’ll combine its present operations in Nevada and California.
“We’re proud to bring ‘The Unified Vibe,’ our acquisition structure and our cannabis-centric culture to Fiore. Unified has built out an amazing acquisition program and integration infrastructure and is currently working with a US$200 million pipeline of M&A opportunities. Our team is ready to hit the ground running to expand into Fiore’s current markets, build out the combined company in all five key markets, and help stakeholders and investors accelerate their liquidity options,” said Paul Lufkin, Unified’s executive chairman.