TORONTO, April 12, 2022 /PRNewswire/ – Halo Collective Inc. (“Halo” or the “Company”) (NEO: HALO) (OTCQX: HCANF) (Germany: A9KN) today announced that its Budega Westwood Dispensary passed its Los Angeles inspection and is expected to open within 30 days.
The Budega Westwood location is perfectly located nestled in between Westwood to the west and Beverly Hills to the east, right off of one of LA’s most traveled and famous thoroughfares for locals and visitors, the Santa Monica Boulevard (10461 Santa Monica Blvd) and within two miles of the University of Los Angeles California campus. The facility is leased and near complete with renovations of its approximately 1,500 square foot prime retail space with the potential to expand the site to up to 3,000 square feet.
On Friday, March 31, 2022, Budega Westwood successfully passed the local Department of Cannabis Regulation (“DCR”) final site inspection and has been approved to proceed with the final state license review citing no violations. Budega Westwood is now into final state licensing administrative review and once opened will mark the second of three planned Los Angeles dispensaries following the opening of the Company’s first dispensary in the Arts District of North Hollywood in March 2022.
Budega Westwood will follow the retail cadence of NOHO by continuing to offer our vast product assortment exceeding 1,000 SKUs, including many top-tier California brands such as Jungle Boys, Jeeter, Cookies, and Kiva as well highlight Budega’s vertically integrated line of branded products, which remain amongst the top selling SKU’s at Budega NOHO. In addition, the store will also stock Halo’s Hush™ branded cartridges, gummies, and pre-rolls. The store plans to operate Monday through Sunday from 7 a.m. to 10 p.m. Visit www.budega.com for more information or to place your order online.
It is with great pride that we announce our introduction into southern California’s retail cannabis market is proving to be successful. By means of analyzing internal reports, guest feedback and participation in our various proprietary programs and through measurement of both the customer frequency and sales trajectory, our NoHo location is exceeding the initial internal estimates for financial performance. Our emphasis on creative market share capture, development of trend setting customer loyalty programs and our front line execution, combined with a strong product assortment and service standards validates that cannabis consumers are receptive to the different experience that we are delivering and making Budega the place to shop, work and transact for locals and visitors.
“The expansion of our Budega concept furthers our presence in the fast-growing, under-served California market,” commented Kiran Sidhu, Halo’s Chief Executive Officer. “We have put significant effort into building a differentiated retail concept, creating a superior experience for our customers with a wide variety of high-quality products to serve discerning consumers and meet any need. We expect the Budega brand to achieve a leadership position amongst cannabis dispensaries,” stated Kiran Sidhu, CEO of Halo.
California is the highest-grossing state for cannabis retail sales in the United States, with legal retail sales of $5.2 billion1 in 2021, up 17% from 2020. California is projected to gross $7 billion by 2025.2 California is the largest legal cannabis market in the United States and is less saturated than other mature retail markets. In Los Angeles County, there are approximately 250 licenses3 for a population of 3.9 million across 500 square miles4, compared to Oregon, which has 4.3 million people and approximately 800 stores across 98,466 square miles5. There are roughly two licenses per 100,000 people in California, one of the lowest rates in the nation among states that support legal recreational sales. By comparison, Oregon has 18 retail shops for every 100,000 residents. Colorado boasts a similar ratio, and Washington state’s rate is more than triple California’s6.
As Halo continues to implement its seed-to-sale verticalization strategy, owning and operating retail businesses, particularly in California, is key to increasing value by controlling distribution and adding operating margin. As such, the closing and acquisition of 66 ⅔% of the Westwood Los Angeles dispensary businesses and previously 100% of its respective management company marks another milestone.
Further to its press release dated February 6, 2021, the Company has completed the acquisition of all of the issued and outstanding membership interests of ZXC11 Company Majority Member (as defined below) (approved social equity applicant which owns 66 ⅔% of ZXC11 LLC (“ZXC11”)), in a strategic move to further the Company’s presence in California’s growing cannabis market.
A subsidiary of PSG Coastal LLC merged with the limited liability company that owns 66 ⅔% of ZXC11 (the “ZXC11 Company Majority Member”). ZXC11 Company Majority Member survived, and PSG, as a result, owns 100% of ZXC11 Company Majority Member. The other 33 1/3% of ZXC11 continues to be owned by the social equity applicant (which is required under the DCR regulations).
The consideration payable by Halo in connection with this merger is an aggregate of 390,769 Halo shares, issuable as follows:
- 236,903 Halo shares were issued on March 2, 2021 as a non-refundable pre-closing deposit upon acceptance of the transaction by NEO Exchange, of which 168,519 will be subject to the Pooling Agreement; and
- 153,865 Halo shares were issued at the closing of the merger.
The merger agreement includes customary representations and warranties, closing conditions, and indemnification provisions. In addition, upon closing, Halo issued an aggregate of 11,539 Halo shares to an arm’s length party as a finder’s fee, and such shares will be subject to a statutory hold period of four months and one day.
SOURCE Halo Collective Inc.
Leave a Reply