Hemp goods maker LFTD Partners (OTCQB: LIFD) announced Tuesday it entered into letters of intent for four separate acquisitions to expand into the regulated cannabis market in Illinois.
The company plans to buy Illinois cannabis licenses, lease manufacturing space in Skokie, purchase industrial buildings in Rockford and invest in retail businesses, according to a company news release.
“These acquisitions will significantly diversify our business into some exciting marijuana, real estate and retail businesses,” Gerard Jacobs, chairman and CEO, said in a statement. “Our executive team is very familiar with Illinois as we are from Chicago and Kenosha, and in John Murray and Erik Carlson we have met two highly intelligent entrepreneurs whom we are excited have as partners.”
The Florida-based company said it would issue about 7.6 million shares of unregistered common stock to complete the deals, which could begin closing by mid-March.
Nicholas Warrender, vice chairman and COO, said, “Our experience in New Mexico has convinced us that Lifted’s Urb brand can be successfully extended into marijuana products. We have finally found the right opportunity to do so in Illinois, which is a large, ‘limited license’ state.”
The company has been battling a proposed class action filed in November by two men who claim LFTD’s Urb products contained THC levels far exceeding legal limits.
There’s also regulatory uncertainty in Illinois when it comes to hemp. In January, a bill to regulate hemp products failed in the state legislature. Meanwhile, Chicago Mayor Brandon Johnson has been pushing for city-level hemp business licenses.
LFTD’s first deal of the four involves buying craft grow, infuser and transport licenses. The second is for a long-term lease of an 18,558-square-foot Skokie industrial space already built for marijuana manufacturing.
In Rockford, LFTD will purchase two industrial buildings that could be used for cultivation or THC-infused beverage production, or potentially sold.
The final deal targets Mrs. Buckbee’s Wake N Bakery, a hemp cafe, and at least 50% stakes in District Bar & Grill and Half Baked Bar in Rockford.
“These all-stock acquisitions will add valuable Illinois cannabis licenses, two industrial buildings, and retail businesses to the asset side of our balance sheet,” William Jacobs, president and CFO, said. “Based upon an appraisal, we expect but cannot guarantee that the ‘as is’ value of just one of the two industrial buildings will likely exceed the aggregate liabilities of the entities that we will be acquiring of roughly $4 million.”
The company warned of several hurdles, including regulatory approvals, potential shareholder dilution, and maintaining social equity status for some acquisition targets.
Upon closing, John Murray will join LFTD’s board and executive team, while Erik Carlson will become general counsel and chief compliance officer, according to the release.
[[{“value”:”The company said it will buy cannabis licenses and properties in the limited license state.
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