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- Creso Pharma (CPH) will enter the US market following the execution of a Member Interest Purchase Agreement to acquire Sierra Sage Herbs (SSH)
- The acquisition will provide the company with an established product suite and CBD products generating strong revenues, as well as an existing 90,000 points of sale with major retailers and over 150,000 direct-to-consumer relationships in the US
- The company will appoint SSH co-founder and CEO Jodi Scott as Executive Director and President of US Operations
- Total upfront consideration of US$21 million (A$29.5 million) will be paid through the issue of shares
- Shares closed 5.88 per cent higher today at 9 cents each
Creso Pharma (CPH) will enter the US market following the execution of a Member Interest Purchase Agreement to acquire Colorado-based consumer packaged goods company Sierra Sage Herbs (SSH).
The acquisition will provide the company with an established product suite and CBD products generating strong revenues, as well as an existing 90,000 points of sale with major retailers and over 150,000 direct to consumer relationships in the US.
Over the coming months, SSH expects to add an additional 20,000 points of sale with key retailers.
Founded in 2008, SSH has grown its unaudited gross revenue to US$8 million (A$11.2 million) in 2020.
However, in 2021 unaudited gross revenue dropped to US$5.7 million (A$8 million) due delays in the acquisition process with Creso Pharma, which impacted digital marketing and product procurement abilities.
Creso Pharma intends to leverage SSH’s established footprint, relationships with large retail groups and consumers as a platform to introduce its CBD product suite to US consumers.
The company will appoint SSH co-founder and CEO Jodi Scott as Executive Director and President of US Operations. She will work to oversee SSH’s operations as well as progress product development and other growth initiatives.
Creso Pharma will purchase a 100 per cent interest in SSH through its subsidiary, Creso Pharma US.
Total upfront consideration of US$21 million (A$29.5 million) will be paid through the issue of shares, based on the 10-day volume weighted average price. At the execution of the agreement this was $0.083.
SSH vendors may also be entitled to additional earn out payments, subject to the satisfaction of performance milestones related to revenue over the coming years.
Shares closed 5.88 per cent higher today at 9 cents each.
