- TAAT Lifestyles & Wellness (TAAT) has signed a letter of intent to acquire US hemp cigarette brand, Redwood Reserves
- The company will acquire Redwood for approximately C$1.16 million and 2.39 million common shares in TAAT
- Through the acquisition, TAAT will gain a loyal customer base, extra production capacity, and an established distribution network
- The parties have agreed to negotiate and settle the terms for execution of the agreement by July 31, 2020
- TAAT Lifestyles & Wellness (TAAT) is up 1.20 per cent and is currently trading at 84 cents per share
TAAT Lifestyles & Wellness (TAAT) has signed a letter of intent to acquire US hemp cigarette brand, Redwood Reserves.
After a definitive agreement, the company will acquire 100 per cent of Redwood, making it a subsidiary. TAAT will pay an acquisition price of around C$1.16 million plus 2.39 million common shares in the company.
Through the acquisition, TAAT will gain a loyal customer base, extra production capacity, and an established distribution network. Access to Redwood’s production system could reduce manufacturing costs for TAAT products by as much as 50 per cent.
In addition, TAAT will use Redwood’s pre-existing network of over 1,600 US retail stores to distribute its Beyond Tobacco products. Redwood’s significant online visibility and online sales are also an added bonus for TAAT.
The company plans to direct all these benefits towards the launch of its Beyond Tobacco cigarettes in 2020’s fourth quarter. TAAT believes that Redwood’s hemp products will complement its own planned product launch.
TAAT’s founder, Joe Deighan, said that the company is enthusiastic about acquiring Redwood for many reasons.
“Their organically-grown proprietary strains of hemp have earned Redwood a loyal base of followers, in addition to strong relationships with retailers and distributors. Aside from that, having access to their production capacity can improve our production timelines for Beyond Tobacco, and reduce costs considerably.
“Thus, bringing Redwood under TAAT’s umbrella is both an operational play for the company itself, in addition to a marketing play to capitalise on the brand recognition of a proven and successful seed-to-smoke hemp company under great leadership.
“I believe Beyond Tobacco can prosper in combined marketing and distribution efforts with Redwood’s product line, which is already highly sought-after. We look forward to exploring these synergies as we get closer to the planned Q4 2020 launch of Beyond Tobacco,” he said.
The two parties have agreed to negotiate and settle the terms for execution of the acquisition by July 31, 2020.
TAAT Lifestyles & Wellness (TAAT) is up 1.20 per cent and is trading at $0.84 per share at 2:26pm EDT.