Under terms of the acquisition, Premium 5 will receive 21 million Canadian dollars ($16.3 million) worth of shares in Heritage, plus more shares to compensate for Premium 5’s net working capital as of the closing date.
Premium 5 will join two other Canadian cannabis producers in Heritage’s portfolio, Voyage Cannabis Corp. and CannaCure Corp.
“The Premium 5 approach of offering high-quality products aligns well with our strategy, and also caters to multiple consumer categories and price points,” Heritage CEO Clint Sharples said in a news release issued Wednesday.
Premium 5 currently sells products in eight of Canada’s 13 provincial and territorial marijuana markets plus two medical marijuana platforms, according to the release,
“High demand for Premium 5 products has resulted in provincial purchase orders nearing CA$10 million since launching sales in June 2020 and growing each month to an annualized run-rate of approximately CA$20 million,” said the release.
In October, Premium 5 said it earned CA$4.4 million in gross sales during its third quarter.
Premium 5 CEO David Schwede will become president of Heritage’s recreational marijuana division.
The deal is expected to close before the end of January.
Heritage Cannabis trades on the Canadian Securities Exchange as CANN.