It’s all about consolidation, vertical integration and out-of-state expansion in Oregon’s overcrowded cannabis industry these days, and nobody is playing the game more aggressively than C21 Investments Inc.
The publicly traded Canadian company on Monday announced an agreement to acquire Grön, the Portland chocolatier, in a deal valued at more than $11 million.
Grön joins growers Eco Firma Farms and Phantom Farms, processor Swell Companies and two retailers to enter into agreements with Vancouver, B.C.-based C21 Investments, although only the Eco Firma Farms acquisition has so far closed.
C21 also has a deal to acquire Silver State Relief, a major Nevada grower and retailer.
Under founder and CEO Christine Smith, Grön established itself as a leading chocolate maker in the recreational cannabis space in late 2016 and early 2017. This year it started a venture called GrönCBD, with a Portland café and products that contain no cannabis or hemp and thus can serve a wider market.
The company is looking to get into California and Nevada, and C21 Investments is the ticket, Smith said in a statement.
“C21 Investments has agreed to invest new capital to expand Grön’s processing, branded products, wholesale and retail distribution operations,” Smith said. “With access to new resources, we can expand the Grön brands into other regulated cannabis markets and compete in the national marketplace with our rapidly growing CBD line.”
In the deal, C21 has agreed to pay Grön $6.8 million as well as “bonus earn-out shares of $4.375 million.” The deal is expected to close by November.
C21 Investments was formed in January, with Eco Firma Farms’ participation, out of the shell of an oil and gas and hard rock minerals producer. It raised $33.5 million to get the ball rolling and was listed on the Canadian Securities Exchange in June.
Major U.S. exchanges are wary of the U.S. cannabis industry, so going public through reverse takeovers of moribund publicly traded Canadian companies and listing in Canada has become a common strategy in the sector.
At the same time, companies in Oregon face an overcrowded market, along with banking, tax and finance hurdles, driving a search for capital and partnerships.