Planet 13 Announces Renegotiation of Santa Ana Acquisition
LAS VEGAS, April 17, 2020 /CNW/ – PRESS RELEASE – Planet 13 Holdings Inc., a vertically-integrated Nevada cannabis company, has announced that following the announcement on April 13, 2020 that it had terminated a definitive agreement to acquire a cannabis sales license and lease for a dispensary in Santa Ana, Calif., from Newtonian Principles, Inc., it has renegotiated the terms of acquisition and has entered into an amendment to the initial definitive agreement.
Upon closing of the acquisition, which is expected to occur when final state and local regulatory approvals are obtained, which is forecasted to be obtained in the next one to three weeks, Planet 13 will pay Newtonian $800,000 in cash (which, along with the deposit (as defined below), results in a total cash purchase price of $1,000,000) and 3,940,932 Class A Restricted Shares in the capital of the company valued at $4.0 million. Newtonian will retain the $200,000 deposit that Planet 13 paid to Newtonion upon entering into of the initial definitive agreement. The parties have also negotiated a 25% lease abatement with the landlord, effective during construction and until opening, reducing costs and increasing flexibility for Planet 13. The shares will be subject to a four-month and one day hold period under Canadian securities laws and following such period will be subject to a lock-up whereby 1/8 of the shares will be released from lock-up each month beginning on the date that is four months plus one day from the acquisition closing date.
This compares to the initial definitive agreement pursuant to which Planet 13 would have been required to pay an additional $5.8 million in cash and 2,039,808 Class A Restricted Shares in the capital of the company valued at $4.0 million for the acquisition.
« We’ve evaluated hundreds of locations in California and continue to believe that our Santa Ana location is the best suited for a Planet 13 style dispensary, » said Bob Groesbeck co-CEO of Planet 13. « While we can’t forecast how COVID-19 might affect our timeline, we’ve negotiated an agreement that reduces the upfront capital invested, gives us control over the timing of fixed costs and provides flexibility on dispensary buildout. We de-risked the transaction substantially while securing the next stage of growth for Planet 13. »