Weekend Unlimited Industries Inc (CSE:POT) (OTCQB:WKULF) announced Wednesday it has signed a non-binding letter of intent to acquire 100% of Ruby Mae’s LLC, a cannabis-infused edibles producer in Oklahoma.
Both companies in September struck a brand alliance and licensing agreement, which helped accelerate the WKND! and Orchard Heights market entry and reach in Oklahoma.
In a statement, Weekend said the proposed acquisition of the Ruby Mae’s brand and intellectual property will further accelerate Weekend’s brand recognition within Oklahoma and substantially expand Weekend’s lineup of brands, products, and sales.
“The proposed acquisition of the iconic Oklahoma-based brand is a significant milestone for the company. With a presence in over 350 dispensaries, combining both Ruby Mae's and Weekend Unlimited brands will add exceptional traction to our growth in the Oklahoma medical cannabis market," said Chris Backus, CEO of Weekend.
“Together we intend to continue the expansion of new innovative products while simultaneously increasing the sales and exposure of our existing portfolio.”
Under the terms of the LOI, Weekend said it will acquire the IP in exchange for USD$2 million, consisting of USD$500,000 in cash and USD$1,500,000 in shares of Weekend.
At closing, Ruby Mae’s will receive USD$200,000 in cash and USD$800,000 of shares with the remaining shares and cash being paid out over a period of 24 months from closing.
In addition at closing, Weekend will enter into a licensing agreement with the vendors for use of the Ruby Mae’s brand in consideration for a licensing fee and Ruby Mae’s co-founders will be granted two board seats of Weekend.
Also the vendors shall be eligible for bonus shares of the company vesting over a period of two years from closing and based on specific revenue targets being achieved and entry into additional US states.
Growing demand for Ruby Mae’s brand
Weekend pointed out Ruby Mae’s recent performance and growing demand for its products.
Between April 1 and June 18, Ruby Mae’s branded products received purchase orders for in aggregate USD$700,923, generating USD$414,127 in revenue (the difference of $286,796 awaiting delivery) with a gross profit of 33%. Additionally, from April to May Ruby Mae’s demonstrated revenue growth by 74% month-over-month, while increasing gross profit by 63%.
"We believe that the Weekend is the right home for the Ruby Mae’s brand at this point in time to go along with the WKND! and Orchard Heights brands,” said Travis Hunter, CEO and founder of Ruby Mae’s. “The Weekend will provide the Ruby Mae’s brand with the resources and capabilities to rapidly grow the company and will permit the brand to continually and aggressively gain market share in the Oklahoma cannabis market.”
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