Investment by Hershey Strategic Capital LP and Shore Ventures III, LP will significantly strengthen balance sheet and enable the Company to leverage its position as one of the only publicly traded companies approved to acquire licensed cannabis assets
DENVER, June 01, 2020 (GLOBE NEWSWIRE) -- General Cannabis Corp. (OTCQX: CANN), the leading publicly traded Colorado cannabis company, announced today that it has reached an agreement that will bring up to $3 million in strategic growth capital to the company. The investment will be funded by Hershey Strategic Capital LP and Shore Ventures III, LP, entities led by managing member Adam Hershey.
The investment is another important step in General Cannabis’ Colorado-based expansion strategy. Over the last two months, General Cannabis became only the second publicly traded cannabis company approved by the State of Colorado’s Marijuana Enforcement Division (the “MED”) to acquire licensed cultivation, manufacturing and retail cannabis operations throughout the state of Colorado. Shortly thereafter, the company closed its acquisition of Boulder, Colorado-based SevenFive Farm, a 17,000 square feet light deprivation greenhouse. Last week, General Cannabis was conditionally approved by the MED, subject to local approval, to close its next planned acquisition—Pueblo, Colorado-based Cannasseur, a vertically integrated company that commenced operations in 2013 and operates a recreational retail dispensary, a 12,000 square foot light deprivation greenhouse and a manufacturing facility that produces Dabtek, a product line of infused concentrates. General Cannabis’ Next Big Crop division continues to operate as an industry leader in the application, design, buildout and operation of cultivation facilities, having worked with over 100 cultivation facilities across the country.
Steve Gutterman, CEO of General Cannabis, said: “This significant capital infusion is a powerful statement about our team, our strategy, the market opportunity and our ability to build shareholder value. We are excited to work with Adam Hershey to leverage the extraordinary market opportunity and competitive advantage offered by MED approval and build on the foundation of our SevenFive Farm acquisition and our planned closing of our Cannasseur agreement. Even in the midst of the tremendous headwinds facing our country and the economy, we believe we are as well-positioned as any company in the space to succeed, and this investment is a further demonstration of that. I want to acknowledge the extraordinary group of executives and professionals in our company, including everyone in our NBC division, our finance, accounting and M&A teams and our new colleagues at SevenFive Farm, whose hard work and focus have put General Cannabis in this position to succeed.”
Said Adam Hershey, “As an investor in the cannabis space, we evaluate many potential deals. General Cannabis, which has a great team and a clear growth path, stood out from the rest. We couldn’t be more excited to become investors.”
Hershey Strategic Capital LP and Shore Ventures III, LP are purchasing, in two tranches, $2.185 million of common stock and warrants. The purchase price of the common stock is $0.3983 per share, representing a 10% discount to the 30-day volume weighted average price as of May 22nd. Along with the shares of common stock, the investors also are receiving warrants for a number of shares equal to 75% of the total number of shares purchased by the investors at an exercise price of $0.5565 per share, which is a 5% premium to the company’s closing price on May 22nd. The first tranche of $800,000 closed on May 29th, 2020, and the second tranche of $1.385 million is expected to close on or before June 5th, 2020. The company anticipates that it will submit Mr. Hershey for approval as an individual suitable investor to the MED, and the company will close an additional $815,000 of capital with the investors on the same terms if Mr. Hershey is deemed suitable. Additional details about the transaction may be found in the Form 8-K filed by the company.
About General Cannabis Corp
General Cannabis Corp is the comprehensive national resource for the highest quality service providers available to the regulated cannabis industry. The company is a trusted partner to the cultivation, production and retail sides of the cannabis business. As a synergistic holding company, the company's divisions are able to leverage the strengths of each other, as well as a larger balance sheet, to succeed. The company's website address is www.generalcann.com.
Forward-looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include statements regarding the investment by Hershey Strategic Capital LP and Shore Ventures III, LP enabling the Company to leverage its position as one of the only publicly traded companies approved to acquire licensed cannabis assets; statements regarding the closing of the Company’s next planned acquisition, Cannasseur; statements regarding the Company’s ability to leverage the extraordinary market opportunity and competitive advantage offered by MED approval and build on the foundation of its SevenFive Farm acquisition and planned closing of its Cannasseur agreement; statements regarding the Company’s belief that it is as well-positioned as any company in the space to succeed, and that this investment is a further demonstration of that; and statements regarding the subsequent closings under the agreement with Hershey Strategic Capital LP and Shore Ventures III, LP. Any statements that are not statements of historical fact, such as the statements described above, should be considered forward-looking statements. Some of these statements may be identified by the use of the words "may," "will," "believes," "plans," "anticipates," "expects" and similar expressions. General Cannabis has based these forward-looking statements on current expectations and projections about future events as of the date of this press release. These forward-looking statements are not guarantees of future performance, conditions or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those factors described from time to time in General Cannabis's most recent Annual Report on Form 10-K and most recent Quarterly Reports on Form 10-Q under the heading "Risk Factors" and in subsequent filings with the Securities and Exchange Commission. General Cannabis undertakes no duty to update any forward-looking statements made herein.
Contact:
Steve Gutterman
sgutterman@generalcann.com
303-759-1300