Halo Labs Inc (OTCMKTS:AGEEF) has signed a definitive accord to take over Crimson & Black LLC. The company will issue 6.43 million common shares (each share valued at $0.2332) that amount to $1.5 million. However, the company will issue the shares once LKJ meets certain performance milestones.
Acquires a controlling stake in LKJ
Halo also signed a definitive agreement to acquire a controlling stake of 66.67% in a cannabis dispensary applicant in North Hollywood – LKJ. The total value of both companies is $11.5 million. Following the deal, Halo is entitled to receive a controlling stake in LKJ11 LLC, a planned flagship dispensary. LKJ11 will form a delivery service for Hollywood Burbank, North Hollywood, Studio City, and the Eastern San Fernando Valley. Following the takeover of Crimson and LKJ, Halo will become a seed-to-sale vertically integrated company in California.
4,000 Sq. Ft. Nola stores boast onsite parking. It is situated in a prime location in the northwest corner of Hesby Ave and Lankershim Blvd. The retail management company – Crimson will benefit from an experienced executive team.
Commences retail sales
LKJ expects to begin retail sales in H1 2020. Californian operations will improve revenues and gross margins for Halo amid vertical integration push. Halo will also benefit from the acquisition of LKJ to make a foundation for future takeovers of dispensaries, which are scalable.
Kiran Sidhu, Co-founder and Chief Executive Officer of Halo, said the takeover of Crimson, and LKJ helps the company in its seed to sale vertical integration push. California will become the first sales territory for Halo on getting the license for NOLA, and it is operational. The company expects to replicate the same commercial pitch both internationally and across North America in all the regions. To this effect, the company signed an LOI to takeover Canmart Ltd in December 2019.
Halo will market white-labeled and its own branded cannabis products. It will also make use of the production facility at Cathedral City in Southern California, and distribution, procurement, and production in Northern California to expand direct to dispensary business. Halo will improve its revenues primarily from dispensary sales.