OAKLAND: Harborside Inc. has signed a definitive agreement to acquire 100% of the issued and outstanding equity of Sublimation Inc., an award-winning cannabis manufacturing company located in Oakland, CA, for a total consideration of US$43.8 million, a news release said.
The acquisition is expected to close, subject to customary closing conditions, in July 2021.
Founded in 2016, Sublime is best known for its expansive line of high-potency, high-quality and affordable, Fuzzies branded pre-rolls, a leading brand of pre-rolls in the state of California, as well as vapes and roll-your-own flower kits. Since 2019 Sublime has delivered a revenue CAGR of approximately 70%, and ended 2020 with 7.9% California pre-roll market share.
Sublime is strategically positioned for continued growth as pre-rolls are the fastest growing cannabis sub-segment within the California market since the beginning of 2020. Upon completion of the Acquisition, Harborside expects to realize significant synergies by bringing together Sublime’s brands, production capabilities and robust distribution system with the high-quality cannabis grown at the Company’s Salinas, California cultivation facility which is anticipated to result in additional gross profit and EBITDA by extending the reach of Sublime, Harborside and key branded products throughout the state of California.
Harborside also expects to bolster Sublime’s marketing capabilities, which is expected to drive higher retail margins for the Company as an owned brand within its portfolio. Finally, Harborside will seek to license the Fuzzies California lifestyle brand in additional legal recreational markets across the country, particularly those that do not currently have high potency infused products.
“This acquisition adds an iconic, award-winning California brand, with an exceptional product offering and consumer following, to our growing brand portfolio,” said Peter Bilodeau, Interim CEO of Harborside.
“Harborside has been a customer of Sublime for many years and we know the quality of their products. With the existing production capacity and soon to be completed upgrades at our Salinas cultivation facility, we are well-positioned to support the continued growth of the Sublime brands while expanding the reach of Harborside’s existing branded product portfolio in both the retail and wholesale markets, which we expect to ultimately drive increased profitability across our entire business. We’re very excited to continue to provide consumers with innovative, high-quality products while delivering strong value for our shareholders. The Company will issue new guidance in due course.”
Ahmer Iqbal, CEO of Sublime, added, “Harborside is known for being an innovative pioneer within the California cannabis market and has garnered a long term reputation across the state for being a leading retailer and producing high-quality products. As a leader among California brands, we are thrilled that Sublime will join the Harborside owned-brand portfolio, leveraging their production and retail capabilities to further expand the distribution of Sublime products throughout California.
Harborside Inc. is one of the oldest and most respected cannabis retailers in California, operating three of the major dispensaries in the San Francisco Bay Area, a dispensary in the Palm Springs area outfitted with Southern California’s only cannabis drive-thru window, a dispensary in Oregon and a cultivation/production facility in Salinas, California.
Harborside has played an instrumental role in making cannabis safe and accessible to a broad and diverse community of California consumers since 2006, when it was awarded one of the first six medical cannabis licenses granted in the United States.
Today, the Company holds cannabis licenses for retail, distribution, cultivation, nursery, and manufacturing. Harborside is a publicly listed company on the Canadian Securities Exchange (“CSE”) trading under the ticker symbol “HBOR” and on the OTCQX Best Market under the ticker symbol “HBORF”. www.sedar.com
Sublimation Inc. is one of the most innovative privately held cannabis manufacturers in California and is well known for its great tasting, high potency Fuzzies branded products. The Oakland-based company designs, manufactures and distributes pre-rolls, vape cartridges, pre-ground flower, batteries and gummies under the Sublime brand and for other branded customers.
Founded in 2016, Sublime has won numerous awards for its Fuzzies infused pre-rolls and Gold vape cartridges and holds Medical and Adult-Use cannabis licenses for manufacturing and distribution. www.sublimecanna.com.