Oakland, California-based Harborside said Monday it agreed to acquire the manufacturer and pre-roll brand Sublime for $43.8 million in cash and stock.
According to a news release, Harborside agreed to pay $5.4 million in cash for California-based Sublime, and the other $38.4 million will be in shares of Harborside.
Harborside trades on the Canadian Securities Exchange under the ticker symbol HBOR and on over-the-counter markets as HBORF.
The purchase price was based in part on the projected 2021 revenues of Sublime, which is expecting $24.6 million in revenues for the current year.
In the release, Harborside announced plans to begin selling Sublime-licensed products outside of California, particularly its line of “Fuzzies” infused pre-rolls, in other U.S. states with legal recreational cannabis markets.
“Harborside has been a customer of Sublime for many years and we know the quality of their products,” interim Harborside CEO Peter Bilodeau said in the release.
“With the existing production capacity and soon to be completed upgrades at our Salinas cultivation facility, we are well-positioned to support the continued growth of the Sublime brands while expanding the reach of Harborside’s existing branded product portfolio.”
One of Sublime’s investors, Poseidon Asset Management co-founder Morgan Paxhia, predicted in an emailed statement that the deal “will propel Harborside’s topline growth.”
“This is the type of accretive M&A we like to see in cannabis,” Paxhia said.