Kiaro Holdings Corp., an omni channel cannabis retailer and wholesale distributor, is pleased to announce that the Company has entered into a definitive agreement to acquire all issued and outstanding shares of Sculthorp SEO Inc. (“Cozy Cannabis”), which currently operates a highly desirable retail location in Toronto and three eCommerce business platforms (the “Transaction”). Completion of the Transaction will launch Kiaro into the Ontario retail cannabis market, and provide access to a new digital portfolio focused on the supply of high quality consumption accessories to Canadian, American and Australian consumers.
The total purchase price in connection with the Transaction of $1,350,000 will be settled by $850,000 in common shares of Kiaro, and $500,000 in cash, subject to a $50,000 holdback and customary adjustments.
Key Transaction Highlights
- Provides Kiaro a strategic entry into the U.S. and Australian market: The Transaction provides Kiaro with new revenue segments from the U.S. and Australian jurisdictions with consumption accessory sales. As a result of the Transaction, Kiaro is well-positioned to take advantage of any future U.S. and Australia advances towards federal legalization.
- Solidifies Kiaro’s strategic entry into Ontario: The prime location in the heart of Trinity Bellwoods neighborhood of Toronto is Kiaro’s first brick and mortar store in the Ontario cannabis retail market. The location on Dundas St W. will also serve as the eCommerce hub for Ontario thereby strengthening their best-in-class omni channel retail approach.
- Expands the Company’s eCommerce reach both nationally and internationally: The addition of Vaped.ca, Vaped.com, and VaporizersDirect.com.au, complements Kiaro’s current eCommerce platform and will strengthen Kiaro’s technology-forward approach. As part of the Transaction, members of the Cozy Cannabis executive team will provide transitionary services to support the continued growth of both the existing eCommerce platform and the newly acquired consumption accessory eCommerce sites with further investment and expansion.
- Executes on the plan of revenue and EBITDA growth through acquisition: The portfolio adds to Kiaro’s cash generating assets while providing additional high margin revenue streams.
In connection with the Transaction, Kiaro is excited to announce that Christian Sculthorp, founder and CEO of Cozy Cannabis, will join the Kiaro team as Director of eCommerce for a minimum period of six months. Mr. Sculthorp will oversee the integration of the eCommerce sites into the Company and will use his expertise and entrepreneurial drive to expand on Kiaro’s global digital footprint.
Daniel Petrov, Chief Executive Officer of Kiaro stated, “Operational excellence has always been Kiaro’s driver – operating with one of cannabis retail’s highest gross margin rates demonstrates that ability. With this acquisition, Kiaro adds international exposure with a high margin accessory e-Commerce portfolio.” Eleanor Lynch, Kiaro’s Chief Operating Officer, adds “In addition to our operational goals, national expansion is one of Kiaro’s primary objectives for this year, and we look forward to serving the community of Trinity Bellwoods with our first Ontario location.”
The Transaction is subject to applicable regulatory approvals including, but not limited to, the Alcohol and Gaming Commission of Ontario and TSX Venture Exchange approval and the satisfaction of certain other closing conditions customary in transactions of this nature. It is anticipated that, subject to receipt of all regulatory other approvals, the Transaction is expected to complete in July 2021.
Kiaro Holdings Corp.
Based in Vancouver, British Columbia, Kiaro is an independent, omni-channel cannabis retailer and distributor. Through existing storefronts across British Columbia and Saskatchewan, a wholesale distribution division servicing Saskatchewan, and plans for national expansion, Kiaro is driven to introduce new and experienced consumers to a lifelong exploration of cannabis.