www.growopportunity.ca

Features Business
Neptune acquiring hemp processor SugarLeaf Labs


May 14, 2019
By Grow Opportunity Staff

Topics

LAVAL, Que. - Neptune Wellness Solutions is acquiring North Carolina-based commercial hemp company SugarLeaf Labs, LLC.

Through SugarLeaf, Neptune establishes a U.S.-based hemp extract supply chain, gaining a 24,000 square foot facility located in the important U.S. Southeast region.

SugarLeaf’s cold ethanol processing facility with a processing capacity of 1,500,000 kg uses hemp cultivated by licensed American growers consistent with federal and state regulations to yield high-quality full and broad-spectrum hemp extracts. The U.S. market for hemp is developing rapidly and represents a significant opportunity for the consumer products industry, the company stated in a release.

“With Neptune’s Canada-based operations ramping up production and the cannabis industry growing exponentially around the world due to an evolving legal global framework, now is the time to establish a state-of-the-art supply chain in the U.S. marketplace,” said Jim Hamilton, president and CEO of Neptune.

Neptune will acquire SugarLeaf on a debt-free basis for initial consideration at closing of US$18 million, paid as US$12 million in cash and US$6 million in common shares. By achieving certain annual adjusted EBITDA and other performance targets, additional consideration of up to US$132 million would be paid over each of the next three years as a combination of cash and shares for a maximum aggregate purchase price of up to US$150 million. The transaction is expected to close on or before July 31, 2019, upon completion of standard closing requirements, including regulatory and stock exchange (NASDAQ and TSX) approvals.