CordovaCann (CSE:CDVA)(OTCQB:LVRLF) Announces Letter of Intent to Acquire Majority Stake in Washington Cultivation and Manufacturing Operator
TORONTO, ON / ACCESSWIRE / March 22, 2021 / CordovaCann Corp. (CSE:CDVA) (OTCQB: LVRLF) ("Cordova" or the "Company"), a cannabis-focused consumer products company, announced today that the Company has entered into an arm's length transaction by executing a non-binding letter of intent (the "LOI") on March 19, 2021 to purchase Washington based company, WoW Industries, LLC ("WoW Industries"), which both cultivates cannabis flower and manufactures cannabis derivative products for wholesale and retail distribution in the State (the "Transaction"). The Transaction will enable Cordova to materially expand its production capacity and product lineup in Washington under well-known brands with a strong customer base.
WoW Industries, headquartered in Springdale, Washington, operates a Tier II production facility and 8,000 square foot manufacturing facility that sits on a 15-acre property. The operation cultivates numerous cannabis strains sold under the brand LuvIT Farms and manufactures a variety of cannabis derivative products sold under the brand Altus Concentrates, both of which are sold in dispensaries throughout the state of Washington. WoW Industries is led by a strong operational team that will retain significant ownership and operate the business post-closing. Cordova and the WoW Industries team plan to expand the cultivation canopy and the manufacturing capacity of the operation throughout the remainder of this year, which will position the business for significant growth and margin expansion. The Transaction as contemplated is expected to close on or before June 1, 2021 (the "Closing Date"), subject to certain closing conditions, including but not limited to satisfactory due diligence and board approval of the Company.
Pursuant to the terms of the LOI, Cordova has agreed to purchase 51% of WoW Industries, which includes, but is not limited to, ownership of cultivation and manufacturing equipment, intellectual property, and contracts with customers. The proposed consideration for the Transaction is seven hundred seventy-seven thousand five hundred (777,500) common shares of the Company and sixty thousand United States dollars ($60,000 USD) on the Closing Date. The Transaction is subject to approval from the Washington State Liquor and Cannabis Board and compliance with all applicable laws, rules and regulations.
"We are looking forward to expanding our footprint in Washington and are excited to work with the WoW Industries team to meaningfully grow their operation," said Taz Turner, Chairman and CEO of Cordova. "The growing demand for the LuvIT and Altus products provides a strong tailwind to quickly grow the revenues and cash flow of the business, which should make the acquisition nicely accretive for Cordova."