- Simply Solventless Concentrates (TSXV:HASH) has closed its acquisition of Delta 9 Bio-Tech, a subsidiary of bankrupted Delta 9 Cannabis (OTCPK:DLTNF)
- The acquisition includes a 98,000-square-foot GACP-certified cannabis cultivation facility in Winnipeg, Manitoba, with an annual capacity of 8,000-9,000 kg of dried flower
- Simply Solventless Concentrates provides pure, potent, terpene-rich and ready-to-consume products to discerning cannabis consumers
- Simply Solventless stock has added 490.91 per cent year-over-year
Simply Solventless Concentrates (TSXV:HASH) has closed its acquisition of Delta 9 Bio-Tech, a subsidiary of bankrupted Delta 9 Cannabis (OTCPK:DLTNF).
The acquisition includes a 98,000-square-foot GACP-certified cannabis cultivation facility in Winnipeg, Manitoba, with an annual capacity of 8,000-9,000 kg of dried flower serving markets in Ontario, Alberta, Manitoba, Saskatchewan, British Columbia and the Maritimes, as well as internationally.
Consideration of $3 million, representing an adjusted EBITDA multiple of only 1.2, is reduced to zero thanks to about $3 million of working capital received.
According to Friday’s news release, management believes “the supply demand dynamic is balancing in the Canadian wholesale cannabis marketplace, making it more difficult to procure the inputs that SSC requires,” making the acquisition a timely one.
Simply Solventless will also add approximately $12 million of annualized gross revenue and $2.5 million of annualized adjusted EBITDA, both representing a 20-25 per cent increase for the company as a whole.
The company signed a 10-year lease for the facility with an arms-length party, enabling it to participate in dried flower’s 40 per cent share of the Canadian market, according to data from Headset. Thanks to expected operational synergies, the all-in cash cost of cultivation at the facility is expected to be $0.50-$0.70 per gram, among the lowest for Canadian indoor cannabis cultivation.
A rarity in the cannabis space, Simply Solventless is on track to post its ninth-straight quarter of positive net income in Q4 2024, earning management high conviction about optimizing Delta 9 Bio-Tech towards further value creation.
Leadership insights
“The closing of the Bio-Tech acquisition and subsequent rebranding to Humble Grow Co. marks a significant milestone for SSC, and we thank all parties involved,” Jeff Swainson, president and chief executive officer of Simply Solventless Concentrates, said in a statement. “SSC has world-class processing capabilities in pre-rolls, vapes and concentrates, and we now own a lean, profitable, complimentary cultivation asset that produces high-quality, internationally exportable flower for among the lowest per-gram indoor cultivation costs in Canada. The operational integration of Bio-Tech is largely complete, and looking forward, we will focus on expanding Humble revenue while we continue to execute our highly impactful business plan focused on organic revenue growth and opportunistic acquisitions.”
About Simply Solventless Concentrates
Simply Solventless Concentrates provides pure, potent, terpene-rich and ready-to-consume products to discerning cannabis consumers.
Simply Solventless stock (TSXV:HASH) is up by 3.17 per cent trading at C$0.65 per share as of 9:50 am ET. The stock has added 490.91 per cent year-over-year.
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(Top photo of Simply Solventless Concentrates brand, Roilty: Simply Solventless Concentrates)
