UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 7, 2020
GENERAL CANNABIS CORP
(Exact Name of Registrant as Specified in Charter)
Colorado | 000-54457 | 90-1072649 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
6565 E. Evans Avenue |
| 80224 |
(Address of principal executive offices) |
| (Zip Code) |
Registrants telephone number, including area code: (303) 759-1300
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[_]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[_]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[_]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange |
N/A | N/A | N/A |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 1.01. |
| Entry into a Material Definitive Agreement. |
On April 7, 2020, General Cannabis Corp (the Company) entered into an Asset Purchase Agreement (the Agreement) with The Organic Seed, LLC, doing business under the name Cannasseur (the Seller), pursuant to which the Company agreed to acquire the assets of the Seller which includes a recreational retail dispensary, a 12,000 square foot light deprivation greenhouse, and a manufacturing facility based in Pueblo West, Colorado.
The Agreement provides that the Company will acquire Cannasseur for $2,350,000 (the Purchase Price). The Company will pay the purchase price by issuing to the Seller shares of common stock of the Company equal to the purchase price divided by the volume weighted average per share price of the Companys shares for 30 consecutive trading days ending on the second trading day prior to the closing (the VWAP); provided that if the VWAP exceeds $0.55 per share, then the VWAP will equal $0.55 per share for purposes of the foregoing calculation; and if the VWAP is less than $0.45 per share, then the VWAP will be adjusted to equal $0.45 for the purposes of the foregoing calculation. The Company will make reasonable efforts to register the resale of the shares of common stock issued to the Seller. For a period of six months following the closing, the Seller has agreed not to sell any of the shares of the Company received at the closing. The closing is subject to approval of the transaction by the Colorado Marijuana Enforcement Division, as well as other customary closing conditions.
Item 7.01. |
| Other Events. |
The Company issued a press release regarding the execution of the Agreement with the Seller. A copy of such press release is furnished hereto as Exhibit 99.1.
Item 9.01. |
| Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit No. |
Description | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Dated: April 13, 2020
| GENERAL CANNABIS CORP | |
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| By: | /s/ Steve Gutterman |
| Name: | Steve Gutterman |
| Title: | Chief Executive Officer |
Exhibit 99.1
General Cannabis Corp. to Acquire Cannasseur
Strategic Rollup Strategy Drives Revenue Growth, Creating Increased Shareholder Value
DENVER, April 09, 2020 (GLOBE NEWSWIRE) -- General Cannabis Corp (OTCQX: CANN) executed a definitive purchase agreement to acquire The Organic Seed, LLC, doing business under the name Cannasseur, located in Pueblo West, Colorado. Cannasseur, a vertically integrated company that commenced operations in 2013, operates:
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A recreational retail dispensary;
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A 12,000 square foot light deprivation greenhouse; and
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A manufacturing facility, that produces Dabtek, a product line of infused concentrates
The acquisition of Cannasseur is integral to our growth strategy of acquiring and operating cultivation, manufacturing and retail assets, said General Cannabis CEO Steve Gutterman. Further, it enables us to provide products and services to customers who depend on cannabis-based products for medicinal support.
General Cannabis anticipates that with some modernization and process improvements to the existing cultivation center, it can significantly increase production at Cannasseur in its first full year of ownership. The company anticipates that once the acquisition and integration is complete, Cannasseur should generate over approximately $4 million of incremental annual revenue.
The acquisition agreement provides that General Cannabis will acquire Cannasseur for $2.35 million of General Cannabis common equity, priced at the time of closing, subject to a floor of $0.45 per share and a ceiling of $0.55 per share. This all-stock transaction represents the successful execution of many months of work. The acquisition is subject to standard closing conditions, including approvals by Colorado state and local regulators. With this acquisition, General Cannabis will continue to capitalize on Colorados new regulation that allows public companies to own and operate licensed cannabis assets.
Said Gutterman, We expect the Cannasseur acquisition to represent an excellent example of our strategy to find attractive assets and utilize our in-house capabilities to improve performance and financial results. We will continue to look for similar opportunities that meet our acquisition criteria.
About General Cannabis Corp
General Cannabis Corp is the comprehensive national resource for the highest quality service providers available to the regulated cannabis industry. The company is a trusted partner to the cultivation, production and retail sides of the cannabis business. It achieves this through a combination of strong operating divisions, capital investments and real estate. As a synergistic holding company, the companys divisions are able to leverage the strengths of each other, as well as a larger balance sheet, to succeed. The companys website address is www.generalcann.com.
Forward-looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include the following statements: the potential benefits of the acquisition to General Cannabis and its growth strategy; General Cannabis anticipation that with some modernization and process improvements to the existing cultivation center, it can increase production at Cannasseur significantly in the first year of ownership; General Cannabis expectation that once the acquisition and integration has been completed, Cannasseur will generate over $4 million in incremental annual revenue; and statements regarding the Cannasseur acquisition representing an excellent example of the companys strategy to find attractive assets and then leverage its in-house skills to improve performance and financial results. Any statements that are not statements of historical fact, such as the statements described above, should be considered forward-looking statements. Some of these statements may be identified by the use of the words may, will, believes, plans, anticipates, expects and similar expressions. General Cannabis has based these forward-looking statements on current expectations and projections about future events as of the date of this press release. These forward-looking statements are not guarantees of future performance, conditions or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including (i) that the
pending acquisition may not be consummated, (ii) risks related to the duration and severity of the COVID-19 virus outbreak and its impact on General Cannabis business specifically or economic conditions more broadly, including with respect to (a) the potential weakening of demand for General Cannabis products and the disruptions to the companys supply chain, (b) the effects of shelter-in-place orders on customer demand, and (c) the impact of COVID-19 on the U.S. and global economies and financial markets, all of which could significantly harm the companys results of operations and financial condition, and (iii) those factors described from time to time in General Cannabiss most recent Annual Report on Form 10-K and most recent Quarterly Reports on Form 10-Q under the heading Risk Factors and in subsequent filings with the Securities and Exchange Commission. General Cannabis undertakes no duty to update any forward-looking statements made herein.
Contact:
Steve Gutterman
sgutterman@generalcann.com
303-759-1300