The acquisition is expected to streamline operations and reduce administrative expenses.
Canada-based BZAM Ltd. (CSE: BZAM) (OTC: BZAMF) has agreed to acquire cannabis supply chain solutions company Final Bell Canada Inc., a subsidiary of Final Bell Holdings International Ltd.
Under the terms of the share exchange agreement, FBHI will exchange its ownership of FBC for 90 million common shares of BZAM, priced at $0.15 each. The exchange represents about one-third of BZAM’s shares after the transaction. The deal is expected to close around Dec. 18, pending customary closing conditions.
The acquisition is a concerted effort by BZAM to expand its cannabis product portfolio after the company’s losses recently eclipsed the nine-figure mark for 2023, despite raking in more revenue. The company has taken various cost-cutting measures over the year, including layoffs despite the completion of its merger with The Green Organic Dutchman.
In a statement, BZAM CEO Matt Milich mentioned the merger’s potential to strengthen the company’s market position by integrating FBC’s international brand portfolio.
“This Transaction combines BZAM’s cultivation, production, and sales infrastructure with the exceptional portfolio of international brands that Final Bell has brought to market in Canada,” Milich said Wednesday.
Post-acquisition, FBC CEO Greg Boone will join BZAM as President.
As part of the agreement, 14th Round Inc., a subsidiary of FBHI, will continue supplying BZAM with child-resistant packaging and vaporization hardware. The merger is anticipated to position the combined entity as a major player in the Canadian cannabis market, forming what the firm cites as the fifth-largest licensed producer of marijuana in the country.
The deal includes a promissory note of $4 million from FBC to FBHI, maturing in 2025, and a lock-up agreement on the BZAM shares acquired by FBHI.
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