PHOENIX--(BUSINESS WIRE)--Item 9 Labs Corp. (OTCQX: INLB) (the “Company”), a vertically integrated U.S. cannabis dispensary franchisor and operator that produces premium, award-winning products, shared that it has secured the necessary financing to complete the previously announced acquisition of Sessions Cannabis (“Sessions”), one of Canada's largest cannabis retail franchisors. The total cash purchase price of the transaction is $12.8 million, which is being fully funded through an Acquisition Line of Credit with a 5-year term from a commercial lender.
“Our highly anticipated acquisition of Sessions is on track to close in March. We have completed the due diligence process, received all required approvals, and now, secured the financing to bring this transformative acquisition across the finish line and create the largest international cannabis retail franchiser and publicly traded cannabis franchise company in North America,” said CEO of Item 9 Labs Corp. Mike Weinberger.
The Canadian cannabis market is expected to reach upwards of $6.3 billion by 2026, according to data research firm BDSA. Most of the growth is projected to be produced from Ontario, Canada’s most populous province, as it contributes nearly $1.3 billion of legal sales alone.
Sessions currently generates more than CA$80 million in annual systemwide sales with over 45 locations open throughout Ontario, up from 40 earlier in 2022, and is continuing to grow rapidly. The franchise network consists of 15-plus franchisees, with over 10 who are multi-unit owner-operators. The franchise anticipates maintaining strong performance with multiple openings in prime retail shopping centers surrounded by well-known grocers, quick service restaurants, and more, already slated for the coming months.
The franchise business model will become fundamental to accommodate the shifts in the Canadian cannabis landscape and allow the future joint company to aid both existing independent dispensaries and prospective franchisees as part of its international growth strategy. By joining the greater combined North American franchise network of more than 50 dispensaries, they gain the ongoing, dedicated support and buying power needed to excel in highly competitive markets.
“Franchising is the key vehicle to unlocking untapped market potential and significantly increasing brand penetration,” Weinberger continued. “Sessions stores are strategically placed in prime retail locations and have not seen the same impact others have experienced in competitive Canadian cannabis markets. Their dispensaries are thriving, and we anticipate with our unified team that we will be able to scale quickly across the country.”
The closing of the acquisition is subject to customary closing conditions, details of which can be found in the Company's 8-K filing on May 24, 2022.
*Adjusted EBITDA is a non-GAAP financial measure of earnings. Adjusted EBITDA represents EBITDA plus stock-based compensation and non-recurring revenue and expenses.
ABOUT ITEM 9 LABS CORP.
Item 9 Labs Corp. (OTCQX: INLB) is a vertically integrated cannabis operator and dispensary franchisor delivering premium products from its large-scale cultivation and production facilities in the United States. The award-winning Item 9 Labs brand specializes in best-in-class products and user experience across several cannabis categories. The company also offers a unique dispensary franchise model through the national Unity Rd. retail brand. Easing barriers to entry, the franchise provides an opportunity for both new and existing dispensary owners to leverage the knowledge, resources and ongoing support needed to thrive in their state compliantly and successfully. Item 9 Labs brings the best industry practices to markets nationwide through distinctive retail experience, cultivation capabilities and product innovation. The veteran management team combines a diverse skill set with deep experience in the cannabis sector, franchising and the capital markets to lead a new generation of public cannabis companies that provide transparency, consistency and well-being. Headquartered in Arizona, the company is currently expanding its operations space up to 640,000-plus square feet on its 50-acre site, one of the largest properties in Arizona zoned to grow and cultivate flower. For additional information, visit item9labscorp.com.
ABOUT SESSIONS CANNABIS
Sessions Cannabis is a community focused retailer selling safe, Health Canada regulated cannabis. Sessions is one of Ontario's first brick and mortar cannabis retailers with multiple locations in Ontario. The company's mission is to bring people together by providing a retail experience that is inviting, comfortable and educational. More information can be found at sessions.ca.
This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties, including, but not limited to, risks and effects of legal and administrative proceedings and governmental regulation, especially in a foreign country, future financial and operational results, competition, general economic conditions, proposed transactions that are not legally binding obligations of the company and the ability to manage and continue growth. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this news release include the introduction of new technology, market conditions and those set forth in reports or documents we file from time to time with the SEC. We undertake no obligation to revise or update such statements to reflect current events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.