Toronto, Ontario--(Newsfile Corp. - January 7, 2021) - SLANG Worldwide Inc. (CNSX: SLNG) (OTCQB: SLGWF) ("SLANG" or the "Company"), a leading global cannabis consumer packaged goods (CPG) company with a diversified portfolio of popular brands, today announced that it has entered into a definitive agreement and plan of merger (the "Merger Agreement") with respect to its previously announced proposed acquisition (the "Acquisition") of Allied Concessions Group Inc. ("ACG"), a manufacturing and distribution business based in Colorado. Pursuant to the terms of the Merger Agreement, SLANG will issue up to an aggregate of 66,120,730 common shares in the capital of the Company, provided that SLANG may elect that up to 60% of such shares may be issued as restricted voting shares in the capital of the Company, as determined by SLANG in its sole discretion and subject to further adjustment in accordance with the Merger Agreement (the "Shares").
ACG is an Infused Product Manufacturer (MIP) that produces O.pen, Bakked and Pressies branded cannabis products in Colorado. ACG is comprised of two different manufacturing and distribution facilities that extract both hydrocarbon and CO2 oil for all SLANG branded products in Colorado. The Acquisition is the latest development in the Company's strategy to consolidate its supply chain in Colorado, which is one of its core markets with an estimated cannabis market size of $1.7 B1 in 2019. This planned expansion follows SLANG's recent acquisitions of licensed cannabis cultivator Pleasant Valley Ranch, LLC and licensed manufacturer and distributor, Peoria Partners LLC in Colorado.
Chris Driessen, CEO of SLANG, said, "We are thrilled that our long awaited acquisition of Allied Concessions Group is approaching its conclusion. Once we have final approval to close, which we expect this quarter, we will control our own destiny from seed to wholesale of the entire portfolio of SLANG brands in our largest market. This acquisition will allow us to continue to consolidate and streamline our operations in Colorado while increasing our revenue. With greater control over production and distribution planning, we expect to improve our gross profit per unit sold and strengthen our leadership position in the state."
Pursuant to the terms of the Merger Agreement, an aggregate of 3,306,037 Shares will be placed in escrow upon closing of the Acquisition to satisfy indemnification claims and working capital adjustments. In addition, all Shares will be subject to a contractual lock-up pursuant to which 1/8 of the Shares shall be released from such lock-up on the last day of each calendar quarter following closing of the Acquisition.
Completion of the Acquisition remains subject to the satisfaction or waiver of all conditions precedent in the Merger Agreement, including the receipt of the approval of the Colorado Department of Revenue's Marijuana Enforcement Division. Closing of the Acquisition is expected to occur in Q1 2021.
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About SLANG Worldwide Inc.
SLANG Worldwide Inc. is a global leader in the cannabis CPG sector with a diversified portfolio of popular brands distributed across the United States. The Company specializes in acquiring and developing market-proven regional brands as well as launching innovative new brands to seize global market opportunities. For more information, please visit www.slangww.com.
This news release contains statements that constitute "forward-looking statements." Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements, or developments in the industry to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects," "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Forward-looking statements in this news release include, but are not limited to, statements regarding the completion of the Acquisition and SLANG's prospects in Colorado.
Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management of SLANG at this time, are inherently subject to significant business, economic and competitive risks, uncertainties and contingencies that could cause actual results to differ materially from those expressed or implied in such statements. Investors are cautioned not to put undue reliance on forward-looking statements. Applicable risks and uncertainties include, but are not limited to regulatory risks, risks related to the COVID-19 global pandemic, changes in laws, resolutions and guidelines, market risks, concentration risks, operating history, competition, the risks associated with international and foreign operations and the other risks identified under the headings "Risk Factors" in SLANG's final long form prospectus dated January 17, 2019 and "Risks and Uncertainties" in the management discussion and analysis for the year ended December 31, 2019 and six months ended June 30, 2020, each as filed on SEDAR at www.sedar.com. SLANG is not under any obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.
Third Party Information
This press release includes market and industry data that has been obtained from third party sources, including industry publications. The Company believes that the industry data is accurate and that its estimates and assumptions are reasonable, but there is no assurance as to the accuracy or completeness of this data. Third party sources generally state that the information contained therein has been obtained from sources believed to be reliable, but there is no assurance as to the accuracy or completeness of included information. Although the data is believed to be reliable, the Company has not independently verified any of the data from third party sources referred to in this press release or ascertained the underlying economic assumptions relied upon by such sources.
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