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TORONTO, June 18, 2018 — Lineage Grow Company Ltd. (the “Company” or “Lineage”) (CSE:BUDD) wishes to provide an update regarding the Company’s recent M&A initiatives and to layout the framework, for investors, of its vision for corporate growth. The U.S cannabis market is ripe with opportunity for an aggressive roll-up strategy. The market remains fragmented with many fast-growing but undercapitalized companies seeking value-added financial partners.

 

Lineage, with its extensive M&A expertise and access to public markets, is capitalizing on this opportunity by assembling a multi-state portfolio of operating companies at accretive valuations with attractive fundamentals. The Company is focusing on opportunities with cohesive value drivers and high margin revenue streams to deliver branded craft cannabis products sold through best-in-class retail channels. Lineage is executing on opportunities in multiple U.S. jurisdictions where the Company’s strategy is being deployed to drive growth and create shareholder value.

 

To date, Lineage has deployed its M&A growth strategy to assemble the following portfolio of projects and acquisitions: • California: Lineage has entered into agreements in California to acquire a 43,500 sq. ft. craft cannabis cultivator, one of sixteen licensed dispensaries in San Jose, and secured an option to build-out a 55,000 sq. ft. indoor cultivation and extraction facility in Sacramento. Upon closing of these acquisitions and completion of build outs, Lineage will be able to drive sales of premium branded products including craft flower and high-margin concentrates through its whollyowned dispensary while capturing margin along the entire value chain.

 

• Oregon: Lineage has identified two dispensaries operating under the Terpene Station banner with a solid track record of serving the Oregon craft cannabis market. While the Company works towards closing the Terpene Station Acquisition, management is simultaneously evaluating cultivation and extraction opportunities with a view towards achieving full vertical integration in the State of Oregon.

• Maryland: Lineage has entered into a binding letter of intent to acquire a 35% interest in Herbiculture Inc. (“Herbiculture”), a medical marijuana dispensary located in Burtonsville, Maryland offering a high-end retail experience. Herbiculture is one of the few licensed medical marijuana retailers operating in the state of Maryland and is one of only two license holders permitted to operate in Maryland’s 14th Senatorial District.

• Pennsylvania: Lineage has made an investment in a grower/processor applicant with a view towards acquiring an additional interest should the permit be granted. In Pennsylvania, Lineage has partnered with a first-rate operator who has successfully secured a permit to operate 3 dispensaries in the state.

• Washington: Lineage has entered into IP licensing, equipment leasing, and consulting agreements with Mt. Baker Greeneries, LLC – a Tier 2 producer/processor located in Bellingham, Washington. Under a joint-venture with Nutritional High International Inc. (“Nutritional High”), Lineage is developing an indoor cultivation facility to supply an in-house extraction operation and serve as a R & D testing ground for innovative cultivation techniques.

 

These projects are consistent with Lineage’s strategy to build vertically integrated operations in multiple jurisdictions. Management is now focused on completing these previously announced acquisitions while continuing to evaluate growth opportunities that are either highly complementary to projects currently being pursued or those which offer footprint expansion into new markets. Completion of these acquisitions is subject to numerous conditions, including completion of due diligence, negotiation and execution of definitive agreements, and receipt of any necessary approvals.