Simply Solventless Concentrates Ltd. has acquired the popular Lamplighter recreational cannabis brand. SSC is also pleased to announce the appointment of Randeep Gill to the position of Vice President, Commercial.
Lamplighter Acquisition
On January 15, 2024, the Company entered into agreements with a Canadian licensed producer (the “Vendor“), providing for the sale of assets and inventory relating to the production and sale of Lamplighter to the Company. Lamplighter provides premium, ready to consume (“RTC“) cannabis products to markets across Canada, including Ontario, Alberta, and British Columbia. These products currently consist of ultra high potency vape cartridges and infused prerolls.
Mr. Jeff Swainson, President and CEO of SSC, stated: “With Canadian LPs exiting the business-to-consumer market in Canada to focus on international sales, SSC has the opportunity to complement our strong organic revenue growth with acquisitions of quality assets that are accretive to revenue and profitability. Accordingly, we are pleased to announce the acquisition of the popular Lamplighter brand, which provides ultra high potency RTC cannabis products across Canada. The purchase price of $0.6 million will be paid from future Lamplighter cash flow, and the purchase price equals the net book value of the tangible assets acquired. With projected 2023 Lamplighter gross revenue of $6.8 million, and similar revenue projected for 2024, we believe the acquisition will contribute value to our shareholders.”
Acquisition Consideration, 2023 Gross Revenue, and SSC Valuation (1)
|
Lamplighter |
Acquisition Revenue Multiple (Net of Tangible Assets Acquired)(1) |
2023 |
2023 |
2023 |
Current SSC |
Gross Revenue |
|
$600,000 |
0.0x |
$7,000,000 |
$6,800,000 |
$13,800,000 |
$2,000,000 |
0.14x |
|
(1) |
Unaudited. Projections. Please conduct your own due diligence. |
|
(2) |
Enterprise Value calculated as $4.0 million market capitalization less $2.0 million working capital. Share price of $0.08 based on close |
|
(3) |
Gross Revenue Multiple calculated by dividing the Enterprise Value by the Combined Gross Revenue. |
Mr. Swainson added: “SSC and Lamplighter had a projected combined 2023 gross revenue of $13.8 million, compared to current SSC enterprise value of $2 million, representing a gross revenue multiple of 0.14x. Further near-term upside comes from SSC’s new brand Frootyhooty, which launched nine initial SKUs in Alberta during December 2023. Frootyhooty will launch thirteen additional SKUs in Alberta and Ontario during February 2024, with launches in other provinces to follow.”
SSC expects first Lamplighter sales in February, 2024, and for the integration of the Lamplighter brand to be completed by May, 2024.
Lamplighter Acquisition Benefits
The anticipated benefits of this acquisition for SSC are as follows:
- Adds up to 21 additional product listings in Ontario, Alberta, and BC in large product categories.
- Provides sales access to BC, a province that SSC does not currently participate in.
- Adds projected gross revenue of $6.8 million per year (2023 projected Lamplighter run rate).
- Adds material projected gross margin with minimal incremental fixed operating costs.
- The $0.6 million consideration will be paid to the Vendor when the Lamplighter products are sold to the provinces. This limits SSC’s risk on the acquisition.
- Leverages unutilized facility capacity.
- Reduces sales, general & administration costs as a percentage of revenue.
- Diversifies product portfolio into high potency distillate vapes and prerolls.
- Complements SSC’s popular Frootyhooty (live rosin amplified) and Astrolab (solventless) brands.
See below for a link to the Lamplighter website: https://lamplightercanna.ca/
Appointment of Vice President, Commercial
SSC is pleased to announce that Randeep Gill has been appointed to the position of Vice President, Commercial. Randeep will work closely with SSC’s corporate, operations, supply chain, quality assurance, and sales teams, with the goal of driving sales velocity and achieving operational and commercial excellence. Randeep has ten years of commercial, production, and quality assurance experience in the pharmaceutical and cannabis industries, including three years with SSC. Randeep holds a Bachelor of Science degree in Pharmacy, a Pharmaceutical QA/QC post graduate diploma, and a Plant Production and Facility Management diploma.
Mr. Swainson added: “The appointment of Randeep Gill to the position of Vice President, Commercial will help to ensure that SSC continues to execute its ambitious commercialization strategy, which includes both organic and inorganic growth initiatives.”
Corporate Presentation Posted to Website
SSC has posted a new corporate presentation to its website at www.simplysolventless.ca.
About Simply Solventless Concentrates Ltd.
SSC is a public company incorporated under the Business Corporations Act (Alberta). SSC’s mission is to provide pure, potent, terpene-rich ready to consume cannabis products to discerning cannabis consumers. For more information regarding SSC, please see www.simplysolventless.ca.
