Vancouver, British Columbia--(Newsfile Corp. - March 15, 2017) - Laguna Blends Inc. (CSE: LAG) (FSE: LB6A) (OTC Pink: LAGBF), a market leader in the distribution of hemp and cannabidiol products, has signed a letter of intent to acquire 100% of a global cannabis company, with Unaudited Annual Sales of US$12 million and an adjusted EBITDA of US$1.6 million.
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The target company, which remains nameless for competitive reasons, has an extensive portfolio of intellectual property and hemp driven CBD products, including isolates, full spectrum oils, pain creams, oral sprays and other nutraceutical products. It recently acquired a leading brand of innovative cannabis infused beverages that are currently sold in California and Colorado, and anticipates closing contracts in Canada and several other U.S. markets within the next 90 days. It also has a medical division and is currently focusing on Latin America to develop cannabis-based pharmaceutical products.
Ray Grimm Jr., President & CEO of Laguna Blends, stated: "This acquisition represents Laguna's first foray into the rapidly growing international cannabis space. With this acquisition, through licensing deals with licensed growers and manufacturers in legal markets, Laguna is now able to capitalize on the global marketplace by utilizing existing infrastructure. The synergies of the combined entities will allow us to be more aggressive in our expansion and growth strategy and I'm very confident we will be able to create substantial shareholder value through this transaction."
Subject to due diligence and customary closing conditions, consideration for this transaction is expected to be a combination of cash and stock totalling US$12.5 million, with the transaction expected to close in the 2nd quarter of 2017.
The CEO of the target company stated: "As we move forward through the restructuring process of the combined entities, we will continue to focus on high growth strategies and additional acquisitions. To stay competitive amongst our competition, it is very important that we diversify our revenue verticals with new initiatives and product offerings which will add tremendous value to our current and future shareholders."
The Hemp Business Journal estimates the total U.S. CBD market will grow to a $2.1 billion market in consumer sales by 2020, with $450 million of those sales coming from hemp-based sources.
Laguna will continue to source additional distribution channels for its cannaceutical, Pro369 and other product lines and seek joint ventures and acquisitions in order to expand its portfolio, with plans to aggressively begin international expansion into Latin America, Asia and Europe in 2017.
Laguna's growth strategy includes acquiring and incubating companies that formulate and/or manufacture hemp products, which it can market utilizing its B to B network and online marketplace.
The shares are trading at $0.17, well below the $0.80 target price given by Vancouver-based Fundamental Research.
For more information, please visit the company's websites www.lagunablends.com and https://cbdskincream.com or email [email protected]
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