Lineage To Acquire Harborside’s Iconic California Dispensaries And Cultivation Campus

 Creating California’s Premier Vertically Integrated Cannabis Company

CALIFORNIA: Lineage Grow Company and FLRish, a California corporation d/b/a Harborside, have entered into a binding letter agreement that will result in, among other things, Lineage acquiring all of the issued and outstanding securities of Harborside on a debt free basis in exchange for newly issued common shares of Lineage valued at approximately $200 million, according to a company press release.  Harborside operates two flagship dispensaries in the Bay Area, a cultivation facility in Salinas, California, and owns the Harborside brand. The Transaction will provide access to capital required to facilitate Harborside’s expansion plans in California and the contiguous western states. All references to dollar amounts in this press release are to Canadian dollars.

Judge James’ ruling allows the City of Oakland to continue its legal action to protect public health and safety from the misguided attacks of US Attorney Melinda Haag."

Under the terms of the Transaction, 100% of the outstanding securities of Harborside shall be exchanged for Lineage securities. The deemed price per Lineage Share issued to Harborside securityholders shall be $0.165, and the final number of Lineage Shares issued in exchange for the outstanding Harborside securities shall be determined at the time the Transaction closes and will be subject to adjustments based on the anticipated Harborside securities offering and additional near-term acquisitions.

Following completion of the Transaction, current shareholders of Harborside are anticipated to hold in excess of 80% of the common shares of Lineage upon completion of the Transaction (the “Resulting Issuer”). The Resulting Issuer is expected to operate under the name “Harborside, Inc.” The Transaction will be a “fundamental change” under the policies of Canadian Securities Exchange (the “CSE”).  Lineage will file an application to the CSE to approve the Transaction and for the Resulting Issuer to continue trading on the CSE.  Lineage will be calling a special meeting of shareholders to approve the Transaction and related matters and will be filing a management information circular containing disclosure on Harborside, Lineage, the Resulting Issuer and the Transaction which will be provided to the Lineage shareholders prior to the shareholders’ meeting.

Trading in Lineage Shares has been halted because of this announcement and will remain halted until the resumption of trading is approved by the CSE. Assuming the satisfaction of customary closing conditions, including the approval of Harborside and Lineage shareholders and approval by the CSE, the Transaction is expected to close and trading is anticipated to resume in the fourth quarter of this year. When completed, the Transaction will constitute a fundamental change of Lineage (as such term is defined by the CSE). FMI Capital Advisory Inc. (“FMICA”) is acting as exclusive financial advisor to Harborside and Lineage in connection with the Transaction.

Completion of the Transaction will be subject to satisfaction or waiver of terms and conditions, customary or otherwise, including but not limited to satisfactory completion of due diligence, execution of a definitive agreement and all required approvals and consents, including the approval of the CSE and shareholders of Lineage.

Convertible Debenture Financing

Harborside intends to complete a convertible debenture financing (“Convertible Debenture Financing”) prior to the closing of the Transaction, for gross proceeds of CAD $20 million. The funds raised will be used for capital expenditures at Harborside’s cultivation campus in Salinas, CA, development of Harborside’s retail management services business segment, general corporate expenses, working capital, and a loan to Lineage to assist with completion of its previously announced acquisitions pending closing of this “Transaction”.

Management Commentary

Steve DeAngelo, Chairman Emeritus and Co-Founder of Harborside, commented, “I founded Harborside with dress wedding in 2006 to provide a gold standard of medical cannabis retailing; to serve patients with the most attractive facilities, highest levels of care, and best product knowledge in the industry; and to offer and produce safe, innovative and effective products that improve the quality of our customers’ lives. We hoped to demonstrate cannabis can bring benefits to communities instead of harm, to encourage further reform, and in time provide an unrivaled and trusted experience in an adult use market. That time has now arrived, so I am delighted to see Harborside merging with Lineage, which will allow us to access the Canadian capital markets, position Harborside for unparalleled growth and opportunity, and bring our gold standard approach and branded products to more communities and greater numbers of consumers.”

Lineage’s chief executive officer Peter Bilodeau, who will assume the role of Chairman of the Board of Directors of the Resulting Issuer, commented, “We are very excited to be joining forces with Harborside, one of the most iconic and longstanding brands in the cannabis industry, which positions the resulting company extremely well for future growth. After the Transaction, the company will have access to the necessary resources to fulfill our combined vision for  California’s most trusted, vertically-integrated cannabis company focused on high margin retail and branded product sales channels.”

Harborside’s Chief Executive Officer, Andrew Berman, who will serve as Chief Executive Officer of the Resulting Issuer following the Transaction, added, “This combination with Lineage will establish a platform for Harborside to continue expansion of its retail program and vertically-integrated, California-centric business model. Concurrently with this announcement, Harborside is issuing convertible debentures to raise approximately CAD $20m of new funds prior to the Transaction, enabling us to continue executing on our expansion plans as we move through the Transaction documentation and approval processes. These are tremendously exciting times for the company, our staff and the industry. As the fully regulated California market unfolds, we see strong growth in consumer demand and in the area of branded products, a market in which the Harborside and Key brands are market leaders and very well positioned.”

FMICA Chairman Adam Szweras, added, “We are very pleased to see this transaction moving forward and believe it accretes significant value for all parties involved. Harborside is a natural fit with Lineage given the companies’ shared focus on the California cannabis market and specifically high value segments within it such as retail and branded products. We look forward to facilitating the execution of the transaction and playing a role in defining the resulting company’s strategy going forward.”

Green Flower Media Virtual Cannabis Entrepreneur Summit Is May 21-22

CALIFORNIA: Green Flower Media has tapped 30 successful cannabis entrepreneurs, experts, and investors for its Virtual Cannabis Entrepreneur Summit, scheduled to take place online on May 21-22, 2016.

Green Flower’s Max Simon expects more than 15,000 people to log into the free seminar, which will be live-streamed to a global audience in real time.

Expert Talks include:

  • Steve DeAngelo, Harborside Health Center – “The Future Of Cannabis”
  • Emily Paxhia, Poseidon Asset Management – “5 Crucial Investment Lessons From One Of The Most Prolific Cannabis Investors In The World.”
  • Kris Krane, 4front Advisors – “Discover the exciting licensing opportunities in emerging cannabis markets.”
  • Francis Priznar, ArcView Group – “Designing your perfect pitch – Hitting notes cannabis investors need to hear.”
  • Reggie Gaudino, Steep Hill – “How to protect yourself and cannabis from the inevitable entry of big pharma and big agriculture.”
  • Patrick Rea  ,Canopy Boulder – “How to find your unique niche in the cannabis industry.”
  • Julianna Carella, Auntie Dolores / Treatibles – “How to build a cannabis products company the right way.”
  • Aeron Sullivan, Tradiv – “How to open up more and better distribution channels for your cannabis products.”
  • Luke Stanton, Frontera Law – “How to avoid the most costly legal mistakes that happen every day in cannabis business.”
  • Meg Sanders, Mindful – “Why it’s the right time for entrepreneurs and executives to enter the cannabis industry now.”
  • David Drake, Cannabis Reports – “The technology and software you need to run a highly efficient and compliant cannabis business.”
  • Roy Bingham, BDS analytics – “The data about what cannabis consumers are actually buying at dispensaries.”
  • Amy Pointsett, MJ Freeway – “Better, faster, easier ways to operate a fully compliant cannabis company.”
  • Scott Greiper, Viridian capital – “Follow the money: The 12 sectors of the cannabis industry where investment dollars are going.”
  • Chuck Rifici, Nesta Co. – “Business lessons learned from one of the world’s largest cannabis cultivators.”
  • Paul Benhaim, Elixinol – “The wide-open business opportunities in Hemp.”
  • Max Mantrose, Trichome Institute – “Budtenders: 7 things they should know about patient care and cannabis products but often don’t.”

The complete list of speakers and topics can be found here:

California Marijuana Legalization 2015: New Medical Marijuana Law Rankles Top Cannabis Industry Investor

CALIFORNIA: California lawmakers quietly passed Friday the state’s most significant medical-marijuana legislation in almost two decades, but some leaders in the space worry that the law’s good intentions could get lost in the weeds. Paving the way for what supporters say is a much-needed regulatory framework for the state’s multibillion-dollar medical-cannabis industry, the California Senate and Assembly voted to approve the historic Medical Marijuana Regulation and Safety Act, which will require licenses for cannabis dispensaries and create a new state agency to oversee the industry.

Although California residents voted to approve medical marijuana back in 1996, a regulatory plan has until now eluded policymakers, who could not seem to agree on specifics. Legislators finally reached a compromise on three bills, which have been sent for final approval to Gov. Jerry Brown, who is expected to sign them into law. The legislation was approved as part of a comprehensive package pushed through on the final day of the 2015 session.

Despite the historic achievement, some leaders in the field expressed concerns about the implications of regulating an industry that has been unregulated for so long. Steve DeAngelo, co-founder of the ArcView Group, mammoth marijuana-investment firm, and the Harborside Health Center, a nonprofit dispensary in the state, said in a statement Saturday that the time pressures made it impossible for state legislators to adequately consider the impact the new law will have on patients who depend on medical cannabis.

Members Of Congress Stand Up For California Medical Marijuana Dispensary

CALIFORNIA:  Three congressional lawmakers from California are accusing the U.S. Department of Justice of overreach in an ongoing crackdown against Harborside Health Center, widely considered to be the largest and one of the most well-respected medical marijuana dispensaries in the nation.

“We believe DOJ has overstepped its bounds in the Harborside case,” Reps. Dana Rohrabacher (R), Sam Farr (D) and Barbara Lee (D) wrote in a letter last week about U.S. Attorney Melinda Haag‘s effort to shut down the Oakland, California-based Harborside. “We believe DOJ is not acting within the spirit or the letter of the law nor in the best interests of the people who depend on Harborside for reliable, safe medical marijuana.”

The letter notes that public acceptance of medical marijuana has grown nationally, even as federal policy on the substance “stagnates.” To highlight his support, Rohrabacher posed with Harborside’s co-founder and executive director, Steve DeAngelo, at the dispensary.

 

Marijuana Investors Commit More Than $1 Million After Denver Meeting

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Marijuana Investors Commit More Than $1 Million After Denver Meeting

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DEA anti-marijuana order might provoke new wave of drug violence

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Marijuana Entrepreneurs Line Up to Cash In

WASHINGTON: Jim Willett has never smoked pot. His teenage sons think he’s a square. A former Navy pilot, Willett spent a year flying drug interdiction patrols along the Washington coast, checking for ships carrying bales of marijuana. For the graying retiree, voting against the state’s legalization of recreational weed last fall was pretty much a given. [Read more…]

Marijuana Entrepreneurs Line Up to Cash In

WASHINGTON: Jim Willett has never smoked pot. His teenage sons think he’s a square. A former Navy pilot, Willett spent a year flying drug interdiction patrols along the Washington coast, checking for ships carrying bales of marijuana. For the graying retiree, voting against the state’s legalization of recreational weed last fall was pretty much a given. [Read more…]

Medical Marijuana Advocate Slams Eric Holder's Speech: 'How Dare He'

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But not all advocates were satisfied. [Read more…]