Quarterly report pursuant to Section 13 or 15(d)

ACQUISITIONS

v3.22.1
ACQUISITIONS
3 Months Ended
Mar. 31, 2022
ACQUISITIONS  
Acquisitions

2. ACQUISITIONS

 

Recently Completed Acquisitions

 

The Company recently completed the following asset acquisitions, and allocated the purchase price as follows:

 

 

The Hacienda

 

 

Lowell Farm

 

 

 

 

(in thousands)

 

Company, LLC

 

 

 Services

 

 

Total

 

CONSIDERATION

 

 

 

 

 

 

 

 

 

Cash

 

$ 4,019

 

 

$

-

 

 

$ 4,019

 

Transaction costs

 

 

428

 

 

 

190

 

 

 

618

 

Note payable and other obligations

 

 

3,115

 

 

 

9,000

 

 

 

12,115

 

Fair value of subordinate voting shares

 

 

34,358

 

 

 

9,610

 

 

 

43,968

 

Total consideration

 

$ 41,920

 

 

$ 18,800

 

 

$ 60,720

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PURCHASE PRICE ALLOCATION

 

 

 

 

 

 

 

 

 

 

 

 

Assets Acquired

 

 

 

 

 

 

 

 

 

 

 

 

Inventories

 

$ 3,300

 

 

$ -

 

 

$ 3,300

 

Accounts receivable - net

 

 

1,312

 

 

 

-

 

 

 

1,312

 

Land

 

 

-

 

 

 

8,261

 

 

 

8,261

 

Buildings

 

 

-

 

 

 

6,268

 

 

 

6,268

 

Equipment

 

 

-

 

 

 

1,221

 

 

 

1,221

 

Other tangible assets

 

 

739

 

 

 

 -

 

 

 

739

 

Intangible assets - brands and tradenames

 

 

37,299

 

 

 

-

 

 

 

37,299

 

Intangible assets - technology and know-how and other

 

 

-

 

 

 

3,050

 

 

 

3,050

 

Liabilities assumed

 

 

 

 

 

 

 

 

 

 

 

Payables and other liabilities

 

 

(730 )

 

 

-

 

 

 

(730 )

Fair value of net assets acquired

 

$ 41,920

 

 

$ 18,800

 

 

$ 60,720

 

 

·

The Hacienda Company, LLC.

 

On February 25, 2021, the Company acquired substantially all of the assets of the Lowell Herb Co. and Lowell Smokes trademark brands, product portfolio, and production assets from The Hacienda Company, LLC for a purchase price of $41,920. Lowell Herb Co. is a leading California cannabis brand that manufactures and distributes distinctive and highly regarded premium packaged flower, pre-roll, concentrates, and vape products. The acquisition consideration was comprised of $4.1 million in cash and the issuance of 22,643,678 subordinate voting shares and obligations assumed. In connection with this acquisition, the Company completed a change in its corporate name to Lowell Farms Inc. effective March 1, 2021.

 

·

Lowell Farm Services

 

On June 29, 2021, the Company acquired real property and related assets of a first-of-its-kind cannabis drying and midstream processing facility located in Monterey County for a purchase price of $18,800. The 10-acre, 40,000 square foot processing facility will provide drying, bucking, trimming, sorting, grading, and packaging operations for up to 250,000 lbs. of wholesale cannabis flower annually. The new facility will process nearly all the cannabis that we grow at our existing cultivation operations. Additionally, we commissioned a new business unit called Lowell Farm Services (“LFS”), which will engage in fee-based processing services for regional growers from the Salinas Valley area. The acquisition consideration was comprised primarily of a note payable of $9.0 million and the issuance of 7,997,520 subordinate voting shares and obligations assumed. LFS operations became operational during the third quarter of 2021.