Adastra enters into agreement to acquire Phyto Extractions

Phyto Extractions, the best-known brand in Canadian cannabis concentrates, was incorporated in 2019 in the Province of British Columbia and is engaged in the marketing and promotion of cannabis concentrate products in Canada. Learn more at www.phytoextractions.ca (CNW Group/Adastra Holdings Ltd.)

LANGLEY — Adastra Holdings Ltd. announces that it has entered into a share purchase agreement dated September 15, 2021 pursuant to which the Company has agreed to acquire all the issued and outstanding shares of 1204581 B.C. Ltd., doing business as Phyto Extractions from the shareholders of Phyto Extractions.

Phyto Extractions, a brand in Canadian cannabis concentrates, was incorporated in 2019 in the Province of British Columbia and is engaged in the marketing and promotion of cannabis concentrate products in Canada under the Cannabis Regulations. Phyto Extractions licenses its intellectual property to Canadian cannabis license holders and collects royalties generated by selling cannabis consumer packaged goods to provincial distributors and retailers across the country. From July 1, 2020, to June 30, 2021, Phyto Extractions branded products generated unaudited royalty payments totaling $1.82 million. Phyto Extractions is being acquired with minimal long-term debt and positive working capital.

Michael Forbes, Chief Executive Officer of Adastra stated, “We are excited at the prospect of bringing the most prominent legacy brand into Adastra. We believe the proposed acquisition of Phyto Extractions will add tremendous shareholder value. Phyto Extractions currently holds a preeminent place in the regulated cannabis concentrates market owing to unparalleled brand recognition, quality products, market penetration, and exceptional sales team. As licensing agreements expire, Adastra intends to produce all Phyto Extractions products in-house and recognize full revenues resulting from branded sales.”

In consideration for the Acquisition, Adastra has agreed to issue 20 million shares to the Vendors at a deemed price of $0.96 per share for total purchase price of $19.2 million. Pursuant to the terms of the Share Purchase Agreement, the Vendors have agreed that the shares will be subject to a voluntary restricted period of four months and one day from the closing date of the Acquisition. The Acquisition is an arm’s length transaction and there is no finder’s fee payable on closing.